Lawsuit against NU’s retirement plan returns to 7th U.S. Circuit court after revival by U.S. Supreme Court
Posted on July 18th, 2022
A Northwestern labor lawsuit originally dismissed in 2020 is being reexamined by the 7th U.S. Circuit court, which sees cases from Indiana, Wisconsin and Illinois. The U.S. Supreme Court unanimously ruled the court erred in its decision in January, reviving the case.
In the case, originally filed in 2016, NU workers accused the University of violating the Employee Retirement Income Security Act by placing high fees and poor investments on their retirement plans. They alleged that the University unnecessarily hired multiple recordkeepers with “unreasonable” fees. They further claim the University offered too many investment options, preventing the plans from qualifying for lower-cost share classes of specific funds.
The plaintiffs returned to the 7th Circuit Court of Appeals and filed a brief in June, calling on the court to reverse its dismissal of the complaint and allow for additional claims to be added.
On July 1, Northwestern filed brief arguing workers who claim the University violated federal law in its retirement plan have no basis to revive the class action suit.
While the district court dismissed the lawsuit in 2020, the U.S. Supreme Court unanimously determined in January that while workers could choose their investments, this did not prevent the claim because the fiduciary maintains a responsibility to manage and monitor the plan.
The Supreme Court also encouraged the 7th Circuit court to “consider whether petitioners have plausibly alleged” that the University violated its duty of prudence.
“The Seventh Circuit erred in relying on the participants’ ultimate choice over their investments to excuse allegedly imprudent decisions by respondents,” Justice Sonia Sotomayor wrote in the ruling.
In April, the Labor Department sent a letter to the 7th Circuit court, urging the court to vacate its dismissal of the case.
In its July 1 brief, however, the University alleged the plaintiffs failed to prove the plan they suggest was actually available to the fiduciary and would not have been harmful. The University argued that no recordkeeper would have accepted the fee the plaintiffs proposed and that a single recordkeeper could not have accomplished the work.
“Courts do not second-guess fiduciary decisions, but rather ensure that they were reasonable under the circumstances and made in the best interests of the plan and its participants,” the University’s brief read.
Original article: https://dailynorthwestern.com/2022/07/08/campus/lawsuit-against-nus-retirement-plan-returns-to-7th-u-s-circuit-court-after-revival-by-u-s-supreme-court/