The University of Miami is settling a lawsuit over costs of its defined contribution pension plans for $ 1.85 million, according to court documents filed last week.
The school was sued in April 2020 in the Miami Division of the United States District Court for the Southern District of Florida, law firms representing the plaintiffs and the proposed group alleging he was in default. fiduciary duties of prudence and loyalty.
The University failed to monitor expenses or solicit competitive bids for the administration of the plan, which resulted in higher-than-necessary fees paid to recordkeepers Fidelity and TIAA, the plaintiffs said. They also alleged that the school did not carefully select investment options, particularly targeting the CREF equity account and the TIAA real estate account, which they said were expensive and underperforming compared to other options available. Finally, the plaintiffs alleged that the university failed to monitor its appointed trustees.
However, most of those claims hit a wall, with the presiding judge dismissing them earlier this year, granting a motion to dismiss. The only one that has remained active is the part of a claim relating to administrative costs, linked to the duty of care.
This development has led the parties to hold a settlement conference, according to a case filed in court last Tuesday.
Up to one-third of the settlement amount, or over $ 600,000, will go towards attorney’s fees, the agreement Noted.
The regulations also include a non-monetary component that requires the university to issue a request for proposals for administrative and recordkeeping services for the plan within three years. The school also cannot accept an increase in contract fees for either custodian of the records during that three-year period, according to the regulation, which requires court approval.
The plaintiffs’ representatives in this case are the law firms McKay Law, Wenzel Fenton Cabassa and Justice for Justice.
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