Columbia University Settles an Excessive Fees Lawsuit for $13 Million
Parties in a lawsuit alleging fiduciaries of two Columbia University retirement plans engaged in breaches of the Employee Retirement Income Security Act (ERISA) which caused participants to pay excessive fees have agreed to settle.
The case is a consolidation of two lawsuits filed within the same week in 2016. In 2019, U.S. Magistrate Judge Stewart D. Aaron of the U.S. District Court for the Southern District of New York recommended a district court judge deny Columbia University’s motion to dismiss claims in the lawsuit as well as its motion to throw out some testimony by plaintiffs’ expert witnesses.
Allegations in the lawsuit included that Columbia University selected and retained expensive and poor-performing investment options that consistently and historically underperformed their benchmarks and similar funds. In addition, the complaint said Columbia University loaded the plans—the Retirement Plan for Officers of Columbia University and the Columbia University Voluntary Retirement Savings Plan—with many retail share class options that were more expensive than the institutional share class options in the same mutual funds that were otherwise available for it to include in the plans.
