A class-action lawsuit filed last week against Dartmouth-Hitchcock alleges the Lebanon-based health care system mismanaged as much as $1.9 billion in employees’ retirement funds.

In the complaint, filed in federal court in Concord on March 18, the plaintiffs — who include four named former employees and thousands of others — allege that Dartmouth-Hitchcock Clinic, its board of trustees and an investment oversight committee tasked with managing the money paid “excessive” recordkeeping and administration fees on two defined contribution plans for D-H employees, a 401(a) and a 403(b).

The filing also alleges that D-H officials failed to adequately review the plans’ investment portfolios to ensure that each investment was prudent.

“Defendants’ failure to obtain reasonably-priced and properly performing investments from 2016-2020 is circumstantial evidence of their imprudent process to review and control the Plans’ costs and is indicative of Defendants’ breaches of their fiduciary duties, relating to their overall decision-making, which resulted in the payment of excessive recordkeeping and administration fees — the crux of this lawsuit — that wasted the assets of the Plans and the assets of participants because of unnecessary costs,” the lawsuit said.

Plaintiffs allege that the investment oversight committee was in breach of its fiduciary duties under the Employee Retirement Income Security Act of 1974 (ERISA), a federal law that sets minimum standards for retirement and health plans in private industry to provide protection for people in these plans.

In addition, plaintiffs allege D-H and its board of trustees failed to sufficiently monitor the work of the committee as required under federal law, 29 U.S. Code 1109, liability for breach of fiduciary duty; and 1132, which allows plan participants to bring a civil action.

Jennifer Gilkie, a D-H spokeswoman, said in an emailed statement: “Dartmouth-Hitchcock does not comment on the specifics of any pending litigation, however we can state that we deny the allegations and we will vigorously defend this lawsuit. We understand employees may be concerned by this news, but Dartmouth-Hitchcock has managed the Plans in accordance with its fiduciary duties and we remain committed to continuing to serve the Plans for the benefit of all participants and plan beneficiaries.”

The suit was filed by three attorneys with the Harrisburg, Pa.-based firm Capozzi Adler, P.C., on behalf of four named clients: Debra Adams, of Canaan; Danillie Mars, of Claremont; Michelle Miller, of Buskirk, N.Y.; and Anita Dame, of Manchester. The named clients are representative of tens of thousands of participants in the plans, according to the filing. At the end of 2020, a total of more than 31,000 people were listed as participants in the plans.

The filing alleges that, combined, the plans have managed at least $1.2 billion since 2016, and $1.9 billion at the end of fiscal year 2020.

One of the Capozzi Adler attorneys, Donald Reavey, declined to comment beyond the filings. Reached via Facebook messenger, Adams and Mars, the two Upper Valley plaintiffs named in the suit, also declined to comment.

Because of the alleged mismanagement, the suit said that the plans and the more than 31,000 participants in the plans between 2016 and the time the suit is settled are owed “millions of dollars” to restore losses. The suit is not specific in the amount D-H is alleged to owe participants in its retirement plans.

]]>