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Volume XIII, Number 89


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A Back-to-School Progress Report

This is an update to our article, Back to School for ERISA Fiduciary Claims: How to Prepare for This Trend in University Litigation, which was published on August 22, 2017.

As we discussed previously, over the past couple of years there have been lawsuits filed against 20 higher education institutions regarding the retirement plans they offered. Generally, the complaints have claimed the following:

  • Excessive fees for recordkeeping and administration of the plans

  • Too many investment options, many of which were duplicative, unnecessary, and confusing to participants, and contained obscure fees

  • The use of retail funds instead of institutional mutual funds

  • Asset-based recordkeeping fees funded by revenue sharing

  • Failure to adequately monitor the plans

In the last six months, higher education institutions are finally beginning to see some results. The good news is that several of the institutions that had cases filed against them have been able to obtain complete dismissals prior to going to trial, and many others have obtained partial dismissals. In addition, the only institution that has gone all the way to trial, prevailed.

While we do not know how the other lawsuits will be decided, we do know that all the rulings thus far have recognized the sensibleness of having a prudent process for the plan fiduciaries. For example, in the decision in the only lawsuit that has gone to trial, the judge noted that the committee as a whole had acted prudently; however, the judge also took the opportunity to admonish a couple of plan committee members for not taking their duties seriously.

Based on what we have seen so far, we also know that courts have found it important for an institution to be involved in the oversight of its plan offerings. Generally, an institution will form a committee to oversee the retirement plans, and, ideally, the members of the committee will be actively engaged in the oversight of the plans. The decision in the only lawsuit to have gone to trial pointed to the importance of having committee members with firm understanding of their fiduciary duties. Institutions may want to think about offering fiduciary training for newly appointed committee members and ongoing training for the committee itself.

Key Takeaways

The following are a few actions that committees and members may want to take:

  • Holding regular meetings as outlined in the committee charter

  • Reviewing service provider performance

  • Reviewing service agreements

  • Reviewing reports provided

  • Reviewing fees to ensure appropriateness

  • Adopting policies and procedures for the programs

  • Documenting committee work

We will keep you updated as decisions are made with regard to the remaining cases.

© 2023, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.National Law Review, Volume IX, Number 38

About this Author

Ellerbrock, Ogletree, Birmingham, Of Counsel
Of Counsel

Bob Ellerbrock focuses his practice on employee benefits and ERISA.  He regularly  advises clients concerning qualified retirement plans (401(k), defined benefit, 403(b)),  non-qualified plans, fringe benefits, health and welfare benefits, Affordable Care Act compliance,  and executive compensation issues. With experience in the retirement plan industry prior to practicing law, Bob draws on his knowledge counseling clients in the design and implementation of all types of employee benefit plans.


Morgan Epperson Labor Attorney

Morgan represents employers in a broad range of labor and employment law matters, defending clients against claims of discrimination, harassment, retaliation, and wage and hour violations.

Before joining Ogletree, Morgan graduated from the University of Alabama School of Law, where she served on the Alabama Law Review, the National Labor and Employment Moot Court Team, the Moot Court Board, and Bench and Bar Legal Honor Society. During law school, Morgan clerked at Ogletree’s Birmingham office and interned at both the United States District Court for the Northern District...