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, originally filed in federal court in Florida before being transferred to Maryland, was initiated by Tamara Goucher, an employee at All Children’s Hospital in St. Petersburg, Florida. Industry analysts view this suit as a prime example of the litigation risks emerging from the increasing convergence of the wealth management and retirement plan sectors.
Allegations of Prudent and Loyal Duty Breach
The lawsuit centers on the management of two defined contribution retirement plans offered by All Children’s Hospital: a 403(b) and a 401(a) plan. Tamara Goucher, who has reportedly worked for the hospital system for approximately 30 years, claims that between 2015 and 2025, the plan fiduciaries allegedly steered a significant portion of the plans’ assets into a single investment vehicle: the American Century One Choice Target Date Funds.
According to the complaint, these American Century Target Date Funds (TDFs) followed a glide path characterized as "unusually flat and bond-heavy until the target year." Goucher contends that this investment strategy resulted in participants having less exposure to equities than is typical in comparable retirement plans. This approach, she argues, is a direct violation of the fiduciary duty to act with prudence and loyalty, obligations that require fiduciaries to prioritize the best interests of plan participants and beneficiaries.
A Decade of Alleged Underperformance
A critical aspect of Goucher’s claim is the duration over which the alleged imprudent investment choices persisted. The lawsuit asserts that the defendants acknowledged the American Century TDFs as a "major detractor" to growth. However, Goucher alleges that they failed to replace these funds "until long after making this admission." The complaint states that no alternative investment options were provided until September 2025, meaning participants were exposed to the allegedly underperforming funds for over a decade.
The suit further details that the fiduciaries allegedly "doubled down" on this "unconventional" investment strategy before eventually switching to a BlackRock TDF, a fund family widely considered a popular and robust option in the target date fund market.
Performance Discrepancies and Independent Analysis
To substantiate her claims, Goucher presented data indicating that at the commencement of the class period, the 10-year returns of the American Century TDFs lagged behind those of the five most popular TDF options offered by prominent investment firms such as T. Rowe Price, Vanguard, Fidelity, American Funds, and BlackRock.
By 2020 and 2021, the complaint argues that "any reasonable fiduciary" should have recognized the persistent underperformance of the American Century options relative to their competitors. The lawsuit also references Morningstar reports from the period, which allegedly assigned subpar ratings to the American Century TDFs when compared to their industry peers, further underscoring the alleged failure of the fiduciaries to conduct adequate due diligence.
The Role of Qualified Default Investment Alternatives (QDIAs)
Adding another layer to the allegations, the complaint highlights that the American Century TDFs were designated as the Qualified Default Investment Alternative (QDIA) for the 403(b) plan. This means that employees who did not make an explicit investment choice were automatically enrolled in these funds. Goucher asserts that this designation imposed a "heightened duty for fiduciaries to choose a suitable TDF option" to serve in this crucial role, as it directly impacts the retirement savings of a broad base of plan participants who may not be actively managing their investments.
Allegations of Excessive Fees
Beyond the selection of underperforming funds, the lawsuit also raises concerns about the cost of investments. Goucher claims that throughout the period in question, the affiliated investment committee of All Children’s Hospital, along with Transamerica and Creative Planning, opted for more expensive share classes of various funds. This practice allegedly extended to funds from American Century, PIMCO, Janus Henderson, and Invesco, even when more affordable options were readily available.
Goucher characterized this practice as "typically imprudent because it ignores the investment opportunity that is lost when participants pay more on the front end." This suggests a potential breach of fiduciary duty related to managing plan expenses, which directly impacts the net returns for participants.
Industry Context and Litigation Trends
The convergence of the wealth management and retirement plan industries has brought a new set of challenges and potential liabilities for advisory firms. As firms like Creative Planning expand their retirement services, they increasingly find themselves navigating the complex regulatory landscape governed by the Employee Retirement Income Security Act (ERISA).
Bonnie Treichel, a founder and chief solutions officer at Endeavor Retirement, commented on this trend, suggesting that acquisitions are helping firms like Creative Planning bring necessary infrastructure in-house to manage these complexities. However, she cautioned that the convergence poses inherent risks for firms historically focused on wealth management.
"Specialists who are used to that space, they’re used to doing that all the time," Treichel stated. "A lot of these cases, they result in a settlement; or it’s not actually that the fiduciary did anything wrong, because the standard isn’t that you actually choose the right funds. The standard is that you follow a process, but you might have to litigate for 10 years to get that answer."
This perspective highlights the importance of robust processes and documentation in fiduciary decision-making. Even if investment choices do not ultimately outperform, a well-documented and prudent process can serve as a defense against claims of fiduciary breach.
Proliferation of ERISA Litigation
Treichel also noted the recent proliferation of class action lawsuits targeting plan fiduciaries for oversight failures. This trend is partly attributed to the increased availability of retirement plan data through ERISA-mandated federal filings. Unlike the private nature of individual wealth management accounts, retirement plan data is more readily accessible, providing plaintiffs’ attorneys with valuable information to identify potential claims.
"The dollar figures are so different," Treichel observed. "And the way they’re brought are very different, too… in some ways, there’s big money behind bringing these cases." This suggests a growing area of practice for class action law firms specializing in ERISA litigation.
A Growing Wave of Target Date Fund Lawsuits
The Goucher complaint is not an isolated incident. It is part of a broader trend of lawsuits targeting fiduciaries for their selection and retention of American Century TDFs, often making similar arguments regarding underperformance and imprudent management. The National Association of Plan Advisers (NAPA) has reported on several recent complaints against employers, including Ivanti, Sig Sauer, KE Dunn Construction, and OneOncology, all involving the selection of American Century TDFs.
The first significant case in this wave, Phillips v. Elanco, was filed last fall. In that lawsuit, plaintiffs alleged that Elanco Inc. relied too heavily on the recommendations of its plan advisor, Shepherd Financial Investment Advisory, in favoring American Century TDFs and delayed replacing them despite prolonged underperformance. This narrative closely mirrors the allegations made in the Goucher lawsuit.
Creative Planning’s Strategic Expansion in Retirement Services
Creative Planning has significantly bolstered its retirement services and assets in recent years, signaling a strategic focus on this sector. A notable move was its 2022 acquisition of Lockton’s $110 billion defined contribution practice. It is worth noting that Lockton has also been named as a defendant in several other lawsuits concerning the selection of American Century TDFs, indicating a potential ongoing exposure for firms involved in the broader ecosystem of these funds.
Further cementing its position in the retirement space, Creative Planning announced its acquisition of SageView Advisory Group in 2025. This deal, valued at $250 billion in assets, brought aboard one of the industry’s pioneering retirement plan advisor aggregators. The combined entity boasts over 550 advisors, manages 11,800 retirement plans, and serves 80,000 private wealth clients, adding hundreds of billions in retirement plan assets to Creative Planning’s total. Following this significant acquisition, Creative Planning appointed Jon Upham, the former president of SageView, to lead its expanded retirement solutions division, underscoring the strategic importance of this segment.
Responses from Defendants
Creative Planning has not responded to requests for comment regarding the lawsuit. Transamerica also declined to comment, citing its policy of not commenting on pending litigation.
Expert Opinion on the Lawsuit’s Merits
Fred Barstein, CEO and founder of The Retirement Adviser and Plan Sponsor Universities, offered an opinion on the potential success of the Goucher lawsuit. He expressed that it would be "very surprising" if the suit were successful. Barstein suggested that American Century could argue its funds performed as promised, albeit conservatively in a booming market. This perspective introduces the defense’s potential argument that the funds were not necessarily imprudent but rather aligned with a specific, albeit conservative, investment philosophy.
Broader Implications for the Industry
The ongoing litigation involving Creative Planning, Transamerica, and the American Century TDFs underscores several critical trends and implications for the broader financial services industry:
Increased Scrutiny of Fiduciary Responsibilities:
This lawsuit, along with others of its kind, highlights the heightened scrutiny on plan fiduciaries. The duties of prudence and loyalty are paramount, and failure to demonstrate adherence to these standards can lead to significant legal and financial repercussions. Firms operating in the retirement space must maintain rigorous due diligence processes, conduct regular performance reviews, and document their decision-making thoroughly.
The Interplay Between Wealth Management and Retirement Services:
As wealth management firms increasingly integrate retirement plan services, they must be acutely aware of the distinct regulatory and liability frameworks governing ERISA plans. The personal liability that can arise from fiduciary roles in retirement plans is often more significant than that associated with traditional wealth management. This necessitates specialized expertise and robust compliance infrastructure.
The Importance of Investment Selection and Monitoring:
The core of this lawsuit revolves around the selection and continued monitoring of investment options. The alleged failure to identify and act upon underperformance, coupled with the choice of more expensive share classes, suggests a need for a proactive and vigilant approach to investment management within retirement plans. Independent analysis, such as that provided by Morningstar, and comparative performance data are crucial tools for fiduciaries.
The Impact of Mergers and Acquisitions:
The aggressive M&A activity within the retirement plan advisory space, exemplified by Creative Planning’s acquisitions, brings together different cultures, compliance programs, and potential liabilities. Firms must conduct thorough due diligence on acquired entities and ensure seamless integration of compliance and fiduciary processes to mitigate risks.
Data Transparency and Litigation Funding:
The availability of ERISA filing data has democratized access to information for potential plaintiffs, potentially fueling more litigation. Furthermore, the mention of "big money behind bringing these cases" suggests that sophisticated litigation funding may be playing a role in enabling class action lawsuits, increasing the likelihood of such actions being pursued.
In conclusion, the lawsuit filed by Tamara Goucher against Creative Planning and Transamerica serves as a significant case study in the evolving landscape of retirement plan litigation. It underscores the critical importance of fiduciary responsibility, diligent investment oversight, and a comprehensive understanding of the regulatory environment for all entities involved in managing employee retirement assets. The outcome of this case, and others like it, will likely shape best practices and compliance strategies across the industry for years to come.
