Vanderbilt Settlement Receives Final Approval
On October 22, 2019, Judge Waverly D. Crenshaw, Jr. of the U.S. District Court for the Middle District of Tennessee entered an order approving a $14.5 million settlement of a class action case brought by Schlichter Bogard & Denton on behalf of Vanderbilt University workers and retirees.
The lawsuit alleged, among other things, that Vanderbilt’s retirement plan fiduciaries had allowed excessive fees to be charged and included underperforming investments in the plan. The settlement, which benefits a class of more than 40,000 individuals, is the largest to date of a case alleging excessive fees charged by a university 403(b) plan.
In addition to significant monetary relief, the settlement provides for improvements which will benefit the plan and its participants in the future. Among other things, the settlement requires that the plan’s fiduciaries conduct a request for proposals for recordkeeping services and maintain a relationship with a consultant to evaluate investments. Significantly, the settlement also imposes restrictions on the plan’s recordkeepers’ ability to use private participant information for marketing purposes.
Judge Crenshaw wrote that Schlichter Bogard & Denton has “achieved an excellent result on behalf of the class” and noted that this was a “highly complex case with numerous issues that were vigorously contested.” He also remarked that “the affirmative relief herein is extensive and provides substantial additional value to the class.”