Georgetown University is the latest school to defeat a lawsuit challenging the fees and investment options in its retirement plan.
A federal judge dismissed the proposed class action in its entirety, calling the case a “challenge to the fundamental structures of the Georgetown Plans, not the fiduciary attentions or prudence of its Trustees.”
The workers couldn’t show a violation of the Employee Retirement Income Security Act by pointing out the ways Georgetown’s billion-dollar retirement plans differed from the 401(k) plans offered in corporate America, the judge said Jan. 8.
Georgetown is one of at least 20 prominent colleges to be accused since 2016 of retirement plan mismanagement. It’s the fourth school to see a case dismissed outright, joining the University of Pennsylvania, Washington University in St. Louis, and Northwestern Univesity.
The Georgetown workers had no standing to challenge the fees and performance of the TIAA Real Estate account, because that investment performed better, net of fees, than the alternative investment they would have preferred, Judge Rosemary M. Collyer of the U.S. District Court for the District of Columbia said. And their challenge to the CREF Stock account’s performance failed, because ERISA doesn’t authorize a claim for “underperforming funds,” Collyer said.
Collyer also declined to fault Georgetown for using three plan recordkeepers, a move the workers said was inefficient and costly. While Georgetown could have fundamentally transformed its retirement plans in an effort to keep annual record keeping costs below the workers’ preferred price of $35 per person, its failure to do so wasn’t a breach of duty, Collyer said.
Schneider Wallace Cottrell Konecky Wotkyns LLP and Berger Montague PC represented the workers. Mayer Brown LLP represented Georgetown.
The case is Wilcox v. Georgetown Univ., D.D.C., No. 1:18-cv-00422-RMC, 1/8/19.