Cerner could pay $4 million after allegedly mismanaging employee retirement plans
A $4.05 million settlement would resolve two lawsuits filed by current and former Cerner employees. These suits alleged Cerner chose costly investment options and defaulted to its own stock to match employee contributions.
“We have no comment beyond the filing,” says Kristie Welder, an attorney for the plaintiffs.
Damages of $10 million to $15 million were alleged by lawyers for the plaintiffs according to a court filing. The lawsuits contended the administrators of the retirement program did not reduce investment and record-keeping expenses by taking advantage of Cerner’s enormous bargaining power.
Both sides ultimately agreed to submit the case to a neutral, third-party mediator after Cerner had sought to force the case into arbitration. A settlement was agreed upon after several hours of mediation, according to court documents, and requires approval from a federal judge.
Cerner has agreed to change the way it administers retirement as a part of the settlement. This would affect more than 28,000 Cerner employees worldwide. There are more than 13,000 employees in the Kansas City area.
This settlement would cover all beneficiaries of Cerner’s retirement plan as of January 21, 2014, or approximately 26,000 people, KCUR reports. Cerner’s retirement plan is said to be among the largest in the U.S. as measured by assets and participants.