A former Cape Cod Healthcare employee is suing the company for allegedly mismanaging its retirement plan and costing participants millions in unnecessary recordkeeping fees.
Cassie Somers of Falmouth on Dec. 1 filed a class action complaint in U.S. District Court in Boston. The filing, first reported by Bloomberg, accuses the Hyannis-based company of violating the Employee Retirement Income Security Act (ERISA) by failing to properly invest on behalf of the plan's 6,746 participants.
Last year the 403(b) plan reported $770 million in assets available for benefits. Cape Cod Healthcare "limited the plan's participants to low-performing and/or high-cost investment options," specifically a Lincoln Financial Group fund, Somers's attorney Oz Vazquez wrote in the complaint.
"That's what ERISA is all about—she's supposed to be entitled to have that faith," Vazquez said in a phone interview. "Like thousands of participants, she was saving for retirement and trusted the folks running the plan to look out for her best interest."
It's too early to know how much money could be recovered, he said, adding that those enrolled in employee retirement plans should review their statements carefully for signs of administrative neglect.
"I don't want to be alarmist, but these shortcomings have been in so many different plans and are very easy to miss," Vazquez said.
Cape Cod Healthcare has until February 6 to respond to the complaint.
"Cape Cod Healthcare is still reviewing the legal complaint filed by Ms. Somers and believe her accusations are unfounded," Julie Badot, executive director of marketing communications, wrote by email.
"We will likely not comment further as this litigation is in process. However, we are confident in our business practices, including the management of our 403(b) partnership plan, and plan to vigorously defend this in court."
