This August, when students around the country were beginning to focus on school, there was a hurricane of legal activity also focused on schools: Within a matter of days, the plaintiffs firm Schlichter, Bogard & Denton filed twelve class action lawsuits in multiple U.S. district courts against private universities claiming they had breached ERISA fiduciary duties owed to participants in their retirement plans.
The suits resemble the dozens of “excessive fee” class actions that Schlichter and other firms have pursued against 401(k) plan sponsors and fiduciaries in recent years. But they are novel in many respects, especially because their targets, the fiduciaries of 403(b) retirement plans, have not been the focus of much ERISA fiduciary breach litigation until now. The new cases will test the essential structure of such plans, which has been in place for decades, and will determine whether fiduciary standards developing in 401(k) matters should be applied in the same manner in the 403(b) context. And they may represent the next frontier in fee litigation, with significant implications for plan sponsors, fiduciaries, participants, and the financial industry. Please see the attached article for further information.