Schlichter Bogard & Denton Obtains Landmark Victory in U.S. Supreme Court on Behalf of Northwestern University Retirement Plan Participants
In a landmark 8-0 decision, the U.S. Supreme Court on January 24, 2022, unanimously ruled in favor of Northwestern University retirement plan participants represented by Schlichter Bogard & Denton. The decision is the second since 2015 in which the U.S. Supreme Court has unanimously found in favor of retirement plan participants represented by Schlichter Bogard & Denton.
Originally filed in 2016, the case brought by Schlichter Bogard & Denton challenges Northwestern’s retirement plan investments and fees, and alleges that defendants “failed to monitor the Plans’ investments in a number of ways, including by retaining recordkeepers that charged excessive fees, offering options likely to confuse investors, and neglecting to provide cheaper and otherwise-identical alternative investments.”
In its order, the U.S. Supreme Court held that the reasoning adopted by the Seventh Circuit Court of Appeals, which affirmed the trial court’s dismissal of the case, was flawed. Citing to Tibble v. Edison – the first ERISA excessive fee case to be heard by the U.S. Supreme Court, which was also brought by Schlichter Bogard & Denton – the Court ruled that “even in a defined-contribution plan where participants choose their investments, plan fiduciaries are required to conduct their own independent evaluation to determine which investments may be prudently included in the plan’s menu of options.” The Court further held that “if the fiduciaries fail to remove an imprudent investment from the plan within a reasonable time, they breach their duty.”
The case is captioned Hughes v. Northwestern University, 595 U.S. ___ (2022).
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