Famed fiduciary tort lawyer Jerry Schlichter has done it again—winning settlement concessions from Emory University
His firm, Schlichter Bogard & Denton, in St. Louis, filed a preliminary settlement approval motion last week on behalf of the university’s employees and retirees in their suit against the university involving their 403b retirement plan.
Filed in August 2016, the plaintiffs in the case sued for alleged breach of fiduciary duty under the Employee Retirement Income Security Act (ERISA). The settlement terms include the creation of a $16.75 million settlement fund for the plaintiffs, as well as “substantial non-monetary relief involving changes in the plan.
The complaint, Henderson, et al., v. Emory University, et al., was originally filed in the U.S. District Court in the Northern District of Georgia in Atlanta.
“This settlement includes both financial compensation and very significant additional non-monetary improvements to the plan going forward. It will enable Emory employees and retirees to improve their ability to build their retirement assets for many years to come,” Schlichter said in a statement.
The case was part of a group of cases filed by the firm, the first 403b cases ever filed against a university alleging excessive fees. Schlichter Bogard & Denton has also filed the first cases over excessive fees in 401k plans.
The complaint alleged that Emory University breached its duties of loyalty and prudence by causing plan participants to pay excessive fees for both administrative and investment services in the plan. Emory denied it committed any fiduciary breach in its operation of the plan.
Besides the financial compensation, Emory agreed to:
- conduct a Request for Proposals for bids on recordkeeping fees;
- prohibit the recordkeeper from using confidential information obtained from Emory employees and retirees to market IRA’s, insurance, and wealth management services;
- hire an independent consultant to make recommendations regarding plan investments;
- inform plan participants of changes in plan structure;.
In 2009, the firm won the first full trial of a 401k excessive fee case against ABB for its employees and retirees.
The firm handled Tibble v. Edison, which is the first and only 401k excessive fee case to be argued before the Supreme Court. In that case, on May 18, 2015, the firm won a unanimous 9-0 decision in which both the AARP and the Solicitor General wrote supporting briefs for the employees.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
