Cambridge Health Alliance Retirement Plan Sued

Cambridge Health Alliance 403(b) retirement plan participants Susan Hoye and Leonardo Jimenez have brought a class action complaint against fiduciaries of the health care provider, alleging retirement plan investors paid excessive fees for plan administration and recordkeeping. The plaintiffs also alleged participants were limited to high-fee investments that underperformed.

Cambridge Health Alliance and the Cambridge Health Alliance Partnership Plan retirement plan committee allegedly failed to manage the plan’s assets prudently and failed to monitor plan fiduciaries, states the complaint.  

“Defendants’ mismanagement of the plan has cost participants millions of dollars, leading to their paying excess fees and losing out on retirement income,” the plaintiffs’ attorneys wrote.   

The Cambridge Health Alliance Partnership Plan comprises $280,398,308 million in retirement assets for 4,541 participants, as of the plan’s 2022 Form 5500.

The plan’s assets under management rank the Cambridge Health Alliance plan among the top 3% of all 403(b) plans, according to BrightScope/Investment Company Institute research on 403(b) plans, published in April 2023. Large plans have significant bargaining power in the marketplace for defined contribution plan services and greater control over the fees and expenses charged against participants’ investments, claimed the complaint.

Cambridge Health’s fiduciaries “did not prudently use this power to ensure participants had access to the best investment options and reduce the plan’s expenses,” states the complaint.  

During the class period, participants individually paid as much as $93 for services identical to those for which participants in similar plans paid less than half that amount, the lawsuit alleged. 

Transamerica Retirement Solutions provided the plan’s recordkeeping and administrative services, and Cambridge Health were a fiduciary of the plan responsible for selecting and monitoring plan investments. Transamerica is not a defendant in the lawsuit.    

The lawsuit sets the purported class of plaintiffs as applying to all persons, except defendants and their immediate family members, who were participants in, or beneficiaries of the plan, at any time between December 29, 2017, through the date of judgment.  

The Cambridge Health Alliance Partnership Plan was established on January 1, 1987.

The plaintiffs are represented by attorneys with Boston law firm FAIR WORK, P.C. The court docket does not show legal representation for the defendants.

Cambridge Health is headquartered in Somerville, Massachusetts.

The complaint was filed December 29 in the U.S. District Court for the District of Massachusetts under the Employee Retirement Income Security Act.

The health care system is the teaching hospital for New England medical schools including Harvard Medical School; Harvard T.H. Chan School of Public Health; Harvard School of Dental Medicine; and Tufts University School of Medicine.

Cambridge Health Alliance does not comment on pending litigation, says a representative for the health system, responding to a request for comment by email. Plaintiff’s attorneys did not respond to a request for comment on the lawsuit.