Lawsuit against NU pension plan returns to 7th Circuit court

A Northwest Labor lawsuit originally dismissed in 2020 is being reconsidered by the US 7th Circuit, which is seeing cases from Indiana, Wisconsin and Illinois. The United States Supreme Court ruled unanimously on the tribunal made a mistake in his decision in January, relaunch the business.

In the case, originally filed in 2016, NU workers accused the University of breaking the Employee Retirement Income Security Act by imposing high fees and bad investments in their pension plans. They alleged that the University unnecessarily hired several archivists with “unreasonable” fees. They further claim that the University offered too many investment options, preventing plans from qualifying for lower-cost share classes of specific funds.

The plaintiffs returned to the 7th Circuit Court of Appeals and filed a brief in June, calling on the court to reverse its dismissal of the complaint and allow additional claims to be added.

On July 1, Northwestern filed a brief arguing that workers who say the University violated federal law in its retirement plan have no basis to revive the class action lawsuit.

While the district court dismissed the lawsuit in 2020, the U.S. Supreme Court unanimously determined in January that while workers could choose their investments, it did not preclude the claim because the trustee retains the responsibility for managing and monitoring the plan.

The Supreme Court also encouraged the 7th Circuit court to “consider whether the petitioners have plausibly alleged” that the University breached its duty of care.

“The Seventh Circuit erred in relying on the participants’ ultimate choice regarding their investments to excuse defendants’ allegedly reckless decisions,” Judge Sonia Sotomayor wrote in the ruling.

In April, the Labor Department sent a letter to the 7th Circuit Court, urging the court to reverse its dismissal of the case.

In its July 1 brief, however, the University alleged that the plaintiffs failed to prove that the plan they suggested was actually available to the trustee and would not have been detrimental. The University argued that no archivist would have accepted the fees proposed by the plaintiffs and that a single archivist could not have done the job.

“The courts do not question fiduciary decisions, but rather ensure that they were reasonable in the circumstances and made in the best interests of the plan and its members,” reads the University’s brief.

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