Schlichter Bogard & Denton, a leading national law firm based in St. Louis, today filed a preliminary settlement approval motion on behalf of Duke University employees and retirees, in their suits against the university involving their 403(b) retirement plan. The plaintiffs in the cases, filed in August 2016 and August 2018, sued for alleged breach of fiduciary duty under the Employee Retirement Income Security Act (ERISA). The settlement terms include the creation of a $10.65 million settlement fund for the plaintiffs, as well as non-monetary relief.
The complaints, David Clark, et al., v. Duke University, et al., and Kathi Lucas, et al., v. Duke University, were originally filed in the U.S. District Court in the Middle District of North Carolina.
This settlement includes both financial compensation and non-monetary improvements to the plan going forward. It will enable Duke employees and retirees to improve their ability to build their retirement assets for years to come, said Jerry Schlichter, managing partner of Schlichter Bogard & Denton, attorneys for the plaintiffs.
The case was among the first cases ever filed against a university alleging excessive fees. Schlichter Bogard & Denton also filed the first cases over excessive fees in 401(k) plans.
The complaints alleged that Duke University breached its duties of loyalty and prudence under ERISA by causing plan participants to pay excessive fees for both administrative and investment services in the plan. Duke denied it committed any fiduciary breach in its operation of the plan.
Besides the financial compensation, Duke agreed for a three-year period to: hire an independent consultant regarding bids for recordkeeping services; ease the ability of participants to transfer their investments out of frozen annuity accounts; analyze the cost of different share classes of mutual funds considered for inclusion in the plan; and avoid the use of plan assets to pay salaries of Duke employees who work on the plan.
Schlichter Bogard & Denton, based in St. Louis, MO, pioneered excessive fee 401(k) and 403(b) litigation on behalf of employees and retirees. Since 2006, the firm has filed over 30 such complaints and secured 15 settlements on behalf of employees. In 2009, the firm won the first full trial of a 401(k) excessive fee case against ABB. The firms Tibble v. Edison is the first and only 401(k) excessive fee case to be argued in the Supreme Court. On May 18, 2015, the firm won a landmark unanimous 9-0 decision in which both the AARP and the Solicitor General wrote supporting briefs for the employees.
Jerry Schlichter and his firm have been referred to by federal judges as preeminent in the field of 401(k) fee litigation; as demonstrating extraordinary skill and determination; as making a significant, national contribution, having educated plan administrators, the Department of Labor, [and] the courts about fees and fiduciary obligations; and has been referred to by federal judges as a private attorney general, causing fees to come down by over $2 billion annually in the entire 401(k) industry.
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