Class Suit Over TIAA Retirement Plan Loan Program Heads to Trial

Participants in 8,000 retirement plans are heading to trial in a lawsuit accusing Teachers Insurance & Annuity Association of illegally siphoning interest payments from plan participants who take loans from their accounts, according to a Manhattan federal judge’s ruling.

Judge J. Paul Oetken of the U.S. District Court for the Southern District of New York on Thursday declined to resolve two of the class action’s pending claims at the summary judgment stage, saying TIAA hadn’t shown that its plan loan program satisfied the Employee Retirement Income Security Act’s prohibited transaction rules.

The lawsuit, led by retirement investor Melissa Haley, claims ...