Novant Health Inc. was sued by a retired doctor and six other current and former employees alleging the nonprofit hospital operator’s retirement plan charged millions of dollars in excessive fees.
The plan’s investment options include about 20 mutual funds, according to the complaint filed today in federal court in Greensboro, North Carolina. The plaintiffs include Karolyn Kruger, a retired doctor who was chief of staff at Novant’s Thomasville Medical Center in North Carolina.
“Given the massive bargaining power of a plan at or near $1 billion in total plan assets, a ‘large’ plan in industry terms, prudent fiduciaries consider far lower cost investments that are accessible to institutional investors,” lawyers for the employees said in the complaint.
About 25,000 Novant employees have been automatically enrolled in the retirement plan since 2009, according to the complaint. The plan’s assets have more than doubled to $1.42 billion from $612 million in 2008, the plaintiffs said.
They seek class-action status for the complaint and a court order removing the committee that oversees the plan, appointing an independent administrator and granting unspecified restitution, damages, interest and legal costs.
Novant, based in Winston-Salem, North Carolina, operates 14 medical centers along with clinics, outpatient surgery centers, medical plazas, rehabilitation programs, imaging centers and community health programs in North Carolina, Virginia, South Carolina and Georgia, according to its website.
The case is Kruger v. Novant Health Inc, 14-cv-00208, U.S. District Court, Middle District of North Carolina (Greensboro).