October 27, 2024 Updated October 27, 2024 16:54
A federal judge has approved a $330,000 settlement in a class action lawsuit alleging Boston University mismanaged employees’ retirement benefits.
In a statement, the university argued that the lawsuit’s allegations are without merit and that the settlement was only reached to avoid the cost and burden of further legal proceedings.
“Boston University believes that this lawsuit is without merit and that the administration of the University’s retirement plan is fully compliant with the Employee Retirement Income Security Act,” the release states. “B.C. also believes that had this case proceeded to trial, the university would have prevailed and defeated the plaintiffs’ claims.”
Under the terms of the settlement, one-third of the $330,000 will be earmarked for legal fees and an additional portion will be used for administrative costs. The remaining funds will be distributed proportionately to eligible employees based on their retirement account assets from August 2019 to June 2024.
The settlement also requires the university to hire a consultant to guide the investment committee on record-keeping costs and the endowment’s performance over the next five years.
Former university employees Connie Sellers and Sean Cooper filed the lawsuit in June 2022 against BC’s trustees, Planning and Investment Board, and 10 “John and Jane Does.”
The lawsuit alleged that the 401(k) retirement plan provided by B.C. to its employees faced excessive record-keeping costs. It also argued that the investment itself was imprudent and in breach of B.C.’s fiduciary duties under the Employee Retirement Income Security Act (ERISA).
“Two B.C. employees, on behalf of a larger group of plaintiffs, are suing in federal court under the federal law ERISA for handing over cash to these trustees for investment and management. “The trustees sued on their behalf for failing to exercise their duty of care,” said Mulhern & Scott PLLC, a partner and law clerk at Harvard Law. said James Mulhern, former editor-in-chief of the Review.
The settlement decision comes after Justice William G. Young, the same judge who approved the settlement, denied B.C.’s motion for summary judgment, ending the lawsuit nearly two years after it was first filed. The decision came just months after the court ruled that the case could go to trial. .
“Simply put, this entire summary judgment exercise was a colossal waste of time,” Young wrote in the memo. “And no one should be surprised.”
Lawyers for the plaintiffs declined to comment.
Lawyers for the university said they believe the investment committee is fulfilling its fiduciary duties and following best practices in investment management.
“Among other things, the committee is committed to regular negotiations to lower fees and regular industry-standard With Benchmark’s help, we monitored retirement plan investments and fees to ensure they were maximally prepared for retirement,” said James Fleckner, an attorney for the university. .
