Aurora Health Care inks deal with worker for pension plan fee suit

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Aurora Health Care pension plan class action overview: 

• Who: Aurora Health Care has reached a deal with employees who sued the system over the management of their retirement plans.
• Why: The plaintiff alleged that the system failed to negotiate lower fees for its employees $3 billion pension plan.
• Where: The settlement deal was filed in a Wisconsin federal court.

A health care system has agreed to a settlement to end class action claims that it failed to negotiate lower fees for its employees pension plan, leading them to lose out on millions of potential earnings on their retirement funds. 

In a joint status report filed Sept. 16 in a Wisconsin federal court, Aurora Health Care Inc. and employee Linda A. Woznicki told the court they had reached a deal to end the class action lawsuit. 

The class action was first filed by Woznicki in 2020, and claimed that the nonprofit health care system violated the Employee Retirement Income Security Act (ERISA) through its management of its employees’ $3 billion pension plan. 

Aurora is a nonprofit health care system that operates 16 hospitals and more than 150 clinics, with headquarters in Milwaukee, Wisconsin and Downers Grove, Illinois, according to its website. 

Woznicki claimed that the non-profit neglected its fiduciary duties under ERISA by failing to negotiate lower recordkeeping fees for the 39,000 members of its retirement savings plan.

Specifically, she said the system failed to review its investment options costs and retained advisers for the plan when similar service providers existed at a lower cost.

Aurora plan participants allegedly lost out on $7.8 million in earnings

She said that the plan was overseen by Transamerica Retirement Solutions. Woznicki said Transamerica charged workers $65 each for recordkeeping fees in 2018, or $2.33 million—which she alleged is almost double the amount other similarly sized plans were charged.

Woznicki said that during 2018 it was reasonable to charge between $27 and $38 per participant for recordkeeping fees for a fund of that size. Other plans of similar sizes were paying $33 per participant on average, or $1.2 million, she said.

Because of these higher fees, Aurora plan participants lost out on an estimated $7.8 million from 2014 to 2018, Woznicki alleged.

The parties plan to file a motion requesting preliminary approval on the deal by Oct. 24.

The news comes after the son of a woman who died of COVID-19 in an Illinois hospital in 2020 filed a class action against the hospital, saying it allowed her sensitive data to be hacked, resulting in fraudulent transactions on her account after her death.

What do you think about Aurora Health Care reaching a settlement with employees? Let us know your thoughts in the comments! 

Woznicki is represented by James A. Walcheske, Scott S. Luzi and Paul M. Secunda of Walcheske & Luzi LLC.

The Aurora Health Care class action lawsuit is Woznicki v. Aurora Health Care Inc et al., Case No.  2:20-cv-01246, in United States District Court for the Eastern District of Wisconsin. 

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