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Compliance September 16, 2020
Another 403(b) Excessive Fee Suit May Settle
Parties in the lawsuit against Cornell University have asked for the trial on the one remaining claim in the suit to be vacated.
Reported by Rebecca Moore
The parties in a 403(b) plan excessive fee lawsuit against Cornell University have requested that the trial be vacated, as they have reached a settlement in principle on the remaining claim in the case.
The case, filed in 2016, originally contained allegations similar to those in other lawsuits challenging university 403(b) plans—alleging excessive fees, imprudent investments, too many investments and imprudent use of more than one recordkeeper.
In a September 2019 decision, U.S. District Judge P. Kevin Castel of the U.S. District Court for the Southern District of New York granted summary judgement for Cornell on many counts. Castel let one remain that alleged defendants breached their duty of prudence by failing to swap out the TIAA-CREF Lifecycle target-date funds (TDFs) with their identical institutional share class funds.
The trial was scheduled to begin September 29. Per the court docket, preliminary approval of settlement documents are to be submitted to the court by the close of business on September 21, at which time the trial will be vacated.