Creative Planning and Transamerica are co-defendants in an ongoing lawsuit accusing plan fiduciaries for a hospital's retirement plan of ignoring "their duties of prudence and loyalty." The class action complaint was originally filed in federal court in Florida (before it was transferred to Maryland last week) by Tamara Goucher, an employee at All Children's Hospital in St. According to industry analysts, the suit is an example of the litigation risks that accompany the convergence of the wealth and retirement plan spaces. In the complaint, Goucher claimed to have worked for the hospital system for about 30 years.
According to Goucher, employees could access two defined contribution retirement plans, including a 403(b) and 401(a) plan. To administer the plans, Transamerica Retirement Solutions provided recordkeeping and administrative services, while Creative Planning served as an additional advisor to the 403(b) option (both were named as co-fiduciaries and defendants in the complaint). Goucher claimed that between 2015 and 2025, the fiduciaries steered many of the plans' assets into a single asset series: the American Century One Choice Target Date Funds.
The funds followed a glide path that was "unusually flat and bond-heavy until the target year," which Goucher claimed meant participants' exposure to equities was below typical plans. While the defendants admitted this was a "major detractor" to growth, Goucher claims they failed to replace the American Century TDFs "until long after making this admission" (according to Goucher, they didn't provide any other options until September 2025). Goucher said the fiduciaries "doubled down" on the "unconventional" choice for over a decade before finally switching to a BlackRock TDF, one of the most popular options in the space.
At the start of the class period, the American Century TDF's 10-year returns lagged the five most popular TDF options at T. Rowe Price, Vanguard, Fidelity, American Funds and BlackRock, according to the suit. Goucher stated that by 2020 and 2021, "any reasonable fiduciary" should have realized American Century underperformed compared to competitors.
She also cited Morningstar reports from the time, allegedly giving the American Century options sub-par ratings compared to peers. Additionally, the defendants purportedly selected the American Century TDFs as the 403(b) plan's qualified default investment alternative, which meant employees were automatically enrolled if they made no investment selection, which created "a heightened duty for fiduciaries to choose a suitable TDF option" to serve in that role. Additionally, Goucher claimed that through the period in question, All Children's affiliated investment committee, Transamerica and Creative Planning opted for more expensive share classes of funds (including from American Century, PIMCO, Janus Henderson and Invesco), when more affordable options were available.
In the complaint, Goucher called the practice "typically imprudent because it ignores the investment opportunity that is lost when participants pay more on the front end." Creative Planning did not respond to a request for comment. Transamerica declined to comment, citing its policy of not speaking about pending litigation. Fred Barstein, the CEO and founder of The Retirement Adviser and Plan Sponsor Universities, told Wealth Management it would be "very surprising" if the suit was successful, claiming American Century could be argued to be performing as promised, but was just "very conservative in a booming market." The Goucher complaint is one of several filed in recent months targeting fiduciaries who favored American Century TDFs, typically making similar arguments to Goucher.
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