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7th University Retirement Plan Lawsuit Settlement Reached

April 17, 2020
 
 

Another lawsuit filed against a prestigious university over its retirement plan practices appears headed for settlement.

Defendant Princeton University has reached a settlement of a class action suit alleging in part that the university’s retirement plans charged participants high administrative fees and expenses, according to the National Association of Plan Advisors. The retirement plan adviser trade group counts about 20 similar lawsuits filed against universities since 2016.

The Princeton suit would mark the seventh of those 20 to end in settlement.

Sides in the Princeton case reached agreement in principle on settlement terms, according to a status report filed with Douglas E. Arpert, U.S. District Court magistrate judge for the district of New Jersey. The agreement includes “therapeutic relief,” but NAPA did not report a dollar figure.

A draft agreement will circulate next week. No proposed timeline exists for seeking court approval or publicizing the agreement.

The six previous settlements NAPA tracked included an $18.1 million settlement at the Massachusetts Institute of Technology, $14.5 million at Vanderbilt University, $14 million at Johns Hopkins University, $3.5 million at Brown University, $6.5 million at the University of Chicago and $10.65 million at Duke University. Many of those settlements also included changes to plan processes, designs or procedures.

Class action lawsuits in question generally focus on university 403(b) plans, which are defined-contribution retirement savings plans similar in structure to 401(k)s but available for nonprofit institutions.

A spate of filings against well-known universities in 2016 often alleged universities offered too many investment options in their retirement plans, potentially confusing employees and resulting in high fees. Claims also included that universities failed to remove expensive or poor-performing investments and that high-fee funds were available instead of less expensive funds.

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