A U.S. District Court ruled recently to certify a large class of plaintiffs in the Employee Retirement Income Security Act (ERISA) fiduciary breach suit against two 403(b) plans sponsored by New York University (NYU).
The seven named plaintiffs will represent a class of at least 20,000 participants covered by the plan beginning from Aug. 9, 2010. At the core of the complaint is a claim that NYU failed to exercise its bargaining power to reduce participant expenses.
This continues the conversation of the current wave of fiduciary breach cases. We’ve discussed this in many of our prior postings:
- Fidelity’s Recent Case Win Highlights the Need for Fiduciary Oversight of Plan Vendors
- A Win for Colleges and Universities
- To the Top and Back in 10 Years: Tibble v. Edison
While an important step in the case, the decision to certify the class was not unexpected. One of the more interesting claims from the co-defendants was that the named plaintiffs are inadequate representatives because they are unaware of the facts underlying the dispute. Deposition testimony seems to support that a number of the plaintiffs did not know their portfolio makeup or how revenue sharing payments worked. The court was not persuaded by the argument, stating the plaintiffs are “entitled to rely on their counsel for advice.”
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