Columbia University Settles Breach of Fiduciary Duty Claim for $13m and Plan Management Changes
Columbia University recently settled a lawsuit filed on behalf of more than 27,000 participants and beneficiaries of the Retirement Plan for Officers of Columbia University and the Columbia University Voluntary Retirement Savings Plan. The suit alleges a breach of fiduciary duty under ERISA. Plaintiffs claim that Columbia University selected expensive and poor-performing investment options. Plaintiffs also allege that Columbia employed two different recordkeepers, which contributed to participants to paying unreasonable and excessive fees for recordkeeping, administrative, and investment services.
Since the lawsuit was filed, plan fiduciaries voluntarily consolidated administrative services and capped costs to a flat, per-participant fee. The recent settlement also included a $13 million payment. In addition to the financial aspect, the settlement also included non-monetary requirements. For example, the university agreed to employ an independent consultant to evaluate bids for administrative services within the next three years, maintain the lowest share class of plan investments, and provide annual training to plan fiduciaries.