Washington University Settles Excessive Fee Lawsuit for $7.5 Million

In what is becoming a familiar story, Washington University has agreed to settle the excessive fee lawsuit for $7.5 Million. This case followed a path like many other cases. The district court originally dismissed the claims stating that the plaintiffs failed to state a claim. That decision was appealed where the Eighth Circuit revived the case, determining that the complaint did provide enough information to infer that the University’s oversight process was flawed. The case was set to go to trial until the announcement of the proposed settlement.

In addition to the monetary settlement, several non-monetary terms will be included. The list of non-monetary items remains consistent with the provisions of other excessive fee settlement agreements.

  • Provide annual fiduciary training for all retirement plan committee members
  • Require committee members to acknowledge that they serve in a fiduciary capacity and understand their fiduciary responsibilities
  • Annual review of the plan’s investment policy statement
  • Complete a request for proposal for recordkeeping services within the next three years
  • Require the committee to work with their investment consultant to monitor the plan’s investment options and fees
  • Prevent the recordkeeper from using plan participants’ personal information to market or sell non-plan services or products

There has been an increase in excessive lawsuits surviving motions to dismiss, allowing the case to proceed to trial. As cases are allowed to proceed, the pressure on defendants to settle increases given the costs and uncertain outcomes of a trial.

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