The University of Miami is settling a lawsuit over fees in its defined-contribution retirement plans for $1.85 million, according to court filings made last week.
The school was sued in April 2020 in the Miami division of U.S. District Court for the Southern District of Florida, with law firms representing plaintiffs and the proposed class alleging that it failed in its fiduciary duties of prudence and loyalty.
The university didn’t monitor expenses or solicit competitive bids for plan administration, leading to higher-than-necessary fees paid to record keepers Fidelity and TIAA, the plaintiffs claimed. They also alleged that the school did not prudently select investment options, taking particular aim at the CREF Stock Account and TIAA Real Estate Account, which they claimed were expensive and underperforming relative to other available options. Finally, the plaintiffs alleged that the university failed to monitor its appointed fiduciaries.
However, most of those claims hit a wall, with the judge presiding over the case tossing them earlier this year by granting a motion to dismiss. The only one that remained active was the portion of a claim dealing with administrative expenses, related to the duty of prudence.
That development led the parties to hold a settlement conference, according to a court filing last Tuesday.
As much as a third of the settlement amount, or more than $600,000, will go toward attorneys’ fees, the agreement noted.
The settlement also includes a nonmonetary component that requires the university to issue a request for proposals for administrative and record-keeping services for the plan within three years. The school also can't agree to an increase in contractual fees for either of the plans’ record keepers during that three-year period, according to the settlement, which requires court approval.
Representing plaintiffs in the case are law firms McKay Law, Wenzel Fenton Cabassa and Justice for Justice.
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