New York University held high-profile tort terror Jerry Schlichter at bay, defeating an ERISA lawsuit brought by employees that alleged the university’s retirement account failed to uphold its fiduciary duty.
U.S. District Judge Katherine Forrest of the Southern District of New York found Tuesday that plaintiffs failed to prove that the trustees of the retirement plan acted imprudently, or that the retirement savings plans they administered suffered losses because of their actions.
“The allegations against the school, slimmed down to two at trial from the seven in the amended complaint, focused on two specific breaches of fiduciary duty—one regarding the inability to reduce high fees from record-keeping vendors, and by allowing funds to be invested in two accounts that allegedly underperformed,” according to The New York Law Journal.
The committee overseeing the funds was shown to have issues, “and several members showed a level of involvement and seriousness towards their fiduciary duties that Forrest found troubling,” according to the Journal. “Overall, however, the committee was able to perform its role adequately, she said, thanks to the advice and guidance of ‘the more well-equipped [c]ommittee members.’”
In her decision, the judge included testimony from noted ERISA attorney Marcia S. Wagner, principal of The Wagner Law Group, who served as an expert witness for the defense in the case.
“Defendant retained [Marcia] Wagner to provide expert testimony regarding NYU’s processes relating to recordkeeping fees[…] The Court found her experience with 403(b) plans impressive and her testimony consistent, reasonable, logical and ultimately, highly credible,” Forrest wrote.
In June, Northwestern University was able to fend off a similar lawsuit from Schlichter, who had accused it of “violating federal benefits law by offering imprudent investments and allowing excessive fees in its workers’ retirement plans.”
A number of such suits were filed in 2016. Targets included Duke University, John Hopkins, The University of Pennsylvania, Vanderbilt, Massachusetts Institute of Technology, New York University, Yale and Columbia.