ERISA University Excessive Fee Cases Take Another Hit

Seyfarth Synopsis: Excessive fee complaint dismissed because the diverse selection of funds available to plan participants negates any claim that Defendants breached their duties of prudence simply because cheaper funds were available.

Nearly 20 universities have been sued under the Employee Retirement Income Security Act ("ERISA") over the fees paid in their Section 403(b) qualified employee benefit defined contribution plans.

Many of these actions have survived the motion to dismiss stage. Still, some courts have been willing to look carefully at ERISA's requirements and quickly determine that these suits have no basis because they do not allege violations of ERISA. Most recently, the Southern District of New York ruled against plaintiffs, noting after a trial that plaintiffs have not proven a violation of ERISA, that prudent process does not require perfection, and that, relative to performance there is no such claim under ERISA. Sacerdote v. New York University