The Department of Labor has intervened to ask the 7th District to vacate the dismissal of an ERISA class action suit filed by Northwestern University 403(b) retirement plan participants. The lawsuit in question, Laura Divane et al. v. Northwestern University et al., is a class action lawsuit in which plan participants were displeased with the administration of the plan and sued members of Northwestern’s Retirement Investment Committee for alleged breach of fiduciary responsibility as outlined by ERISA.
An Illinois federal district court originally dismissed the ERISA suit filed by Northwestern employee retirement plan participants for failure to state a valid claim. The 7th Circuit agreed and upheld the district court’s decision. The U.S. Supreme Court then disagreed and found that the court should have considered the plan participants’ claims in the context of the fiduciaries’ duties, under ERISA, to monitor all plan investments and remove or replace poorly performing investment options, or those that charged unreasonable fees.
Due to the high court’s opinion and because DOL felt plan participants had articulated a plausible claim for relief under ERISA, they asked the 7th Circuit to reinstate the ERISA case to allow the plaintiffs another chance to pursue their breach of fiduciary duty claims in federal district court.
This case points to the important need for plan sponsors to fulfill their fiduciary responsibilities. PRM can provide you with the assistance and the support to avoid this kind of legal action.