Boston Children’s Hospital has reached a settlement in a high-stakes lawsuit accusing the institution of mismanaging its $1.1 billion retirement plan. The agreement, struck during a Feb. 11 mediation, comes after plan participants alleged the hospital allowed excessive fees and underperforming investments, violating its fiduciary duty.
In a joint filing submitted Friday, both parties informed a Massachusetts federal court that they had reached a settlement in principle. While the exact terms remain under wraps, the parties plan to either seek preliminary approval or provide an update to the court by April 18.
Retirement Plan Participants Alleged Costly Mismanagement
The lawsuit, filed in 2022, alleged that Boston Children’s Hospital allowed its retirement plan to be overcharged for recordkeeping and administrative services, significantly exceeding industry standards.
According to the complaint, plan participants paid an average of $73 per year over the last five years—nearly double the rates of comparable plans, which ranged between $23 and $42. Additionally, the plaintiffs argued that the hospital offered underperforming investment options, further harming participants’ retirement savings.
