Lawsuit alleging mismanagement in Northwestern retirement plans back at District Court
A lawsuit accusing Northwestern University of excessive fees in its retirement plan has been reinstated and returned to District Court.Summary
A class action lawsuit alleging Northwestern University violated federal law regarding its retirement plan is proceeding after being remanded to the U.S. District Court for the Northern District of Illinois by the Supreme Court in 2022. The suit, initially filed in 2016 by Schlichter Bogard, claims the University’s retirement plan included “excessive or imprudent fees options,” financially harming participants. Attorney Jerry Schlichter stated the University failed to ensure reasonable fees were charged. Plaintiffs allege participants were unable to maximize retirement savings due to limited, reasonably-priced investment options, thus breaching the University’s fiduciary duty.
The shift from traditional pension plans to 403(b) plans, like the one used by Northwestern, places more financial risk on employees, according to Schlichter. Unlike pensions where employers absorb market losses and high fees, 403(b) plans shift that risk to the employee, potentially reducing retirement funds. Schlichter argues the fees within Northwestern’s plan are “unreasonably high,” impacting employees’ retirement security.
The case will now proceed towards either a settlement or a trial, as the Supreme Court’s decision prevents dismissal. Northwestern University has declined to comment on the ongoing litigation.
(Source：The Daily Northwestern)