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May 30, 2024

Federal Judge OKs $1M settlement in YNHH retirement fee lawsuit

Photo | Michael C. Bingham Yale New Haven Hospital.

Note: This article has been updated to include a comment from Yale New Haven Hospital Inc.

A federal judge on Tuesday approved a $1 million settlement in a class action lawsuit brought by participants in Yale New Haven Hospital Inc.’s retirement plan.

The lawsuit was filed in January 2022 in U.S. District Court for the District of Connecticut by former YNHH employees Kaity Ruilova of Stamford and Eileen Brannigan of New Haven. They filed the lawsuit on behalf of all current and former participants in a tax-sheltered annuity plan provided by the hospital and its affiliates. 

The lawsuit, which was awarded class action status, included a claim that YNHH charged “unreasonable expenses” in the form of excessive administrative fees to participants. While other claims about the way the retirement plan was operated were dismissed, the claim regarding excessive fees remained.

The class for the lawsuit is defined as anyone who participated in the retirement plan at any time between Jan. 21, 2016, and Dec. 11, 2023.

As of Dec. 31, 2020, the plan had more than 26,400 participants with account balances and assets totaling approximately $1.66 billion, “placing it in the top 0.1% of all defined contribution plans by plan size,” court documents state.

According to the settlement agreement, which was approved by all parties in November 2023, members of the class can receive a cash payment based on their year-end account balances during the class period. The amount of the payment will vary for each account. Class members who currently participate in the plan do not need to file a claim to receive their settlement payments. 

Former participants, as well as beneficiaries and alternate payees, needed to submit a claim form by April 9 to receive a payment. The order approving the settlement states that the court “finds that the settlement class has received proper and adequate notice” about the settlement.

A settlement administrator will be appointed to distribute the payments.

The order granting final approval to the settlement, signed Tuesday by U.S. District Judge Michael P. Shea, states that the $1 million amount “is fair, reasonable, and adequate, considering the costs, risks, and delay of trial and appeal.” It adds that the “Plan of Allocation is finally approved as fair, reasonable, and adequate.”

As class representatives, Ruilova and Brannigan will also each receive a one-time award of $12,500 for representing the class, the order states.

The judge’s order also awards attorneys representing the class a total of $250,000 “inclusive of litigation costs and expenses, plus any applicable interest,” adding that it found the expenses “were reasonable and necessary in the prosecution of this litigation.”

In agreeing to the settlement, Yale New Haven Hospital Inc. did not admit to any wrongdoing.

"YNHH, like a number of defined contribution plans, was sued in connection with its Tax Sheltered Annuity Plan," the hospital said in an emailed statement. "That lawsuit asserted challenges to the plan’s recordkeeping fees and certain investments offered in the plan. Some of the claims asserted in the lawsuit were dismissed outright by the court. While YNHH believes it would be successful in defending against the remainder of the claims, it decided to reach a settlement of the lawsuit."

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