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Claim notice filed concerning hospital's retirement plan
A Notice of Claim was sent to the Kane County Hospital Special Services District June 24 by Salt Lake attorney Brian S. King, concerning a former administration''s retirement plan. The claim has been brought on behalf of employees Lori Ramsey and Dan Smalling, and similarly situated past and present employees of Kane County Hospital.
While what happened is complicated, the intent by the formally-seated administrator and board was good. KCH established a 401(k) retirement plan for its employees in 1993. The claim is that Utah state law required any state or municipal government employer provide retirement benefits only through the Utah State Retirement System. In addition, the Internal Revenue Code, 401 (k)''s are not permitted for government employees.
The claim notice asserts KCH was negligent in setting up a retirement plan that violates state and federal law, and that it breached its fiduciary duties to its employees. It further alleges negligence and breach of fiduciary duty in KCH''s selection and supervision of its insurance agent and John Hancock Insurance Company, in establishing and operating the retirement plan from 1993-2007. The Notice of Claim filing is required under the Utah Governmental Immunity Act as a prerequisite to filing suit for damages based on negligence or other not contract claims.
The funds in the 401 (k) have been suspended and KCH employees have not had access to them for several months. The claim notice also alleges that Ramsey and Smalling and similarly situated past and present employees, have lost additional retirement contributions that could and should have been made, but KCH on their behalf from 1993 to the present had KCH established its retirement plan under USRS, as required by Utah law.
While the current hospital administrator and board were not involved in the former administration''s decisions, they now must deal with the ramifications.