Duke University will pay $10.65 million to be free from lawsuits challenging the fees and investment options in its $4.7 billion retirement plan.
This is the second—and largest—class action settlement in the recent series of cases targeting the retirement plans of prominent colleges. The University of Chicago settled similar claims in 2018 for $6.5 million.
The deal also requires Duke to make specific improvements to the plan. The school pledged to give employees more freedom to transfer money out of certain annuities, hire an independent consultant to advise on record-keeping and administrative fees, and refrain from using plan assets to pay any Duke employees for services connected to the plan.
The deal, which stands to benefit more than 40,000 plan investors, allows for an attorneys’ fee award of $3.55 million, along with costs of $825,000.
At least 20 universities have been sued over the fees and investment options in their retirement plans since 2016. Rulings in these cases have been mixed. Only the case against New York University has gone to trial, which resulted in a 2018 victory for the school. Five federal appeals courts have been asked to weigh in, but none has issued a ruling on the merits of these cases.
The next case to settle may be the one against Vanderbilt University. The school in December 2018 sought permission to pause the lawsuit in anticipation of a February mediation with high-profile employee benefits mediator Hunter Hughes Alternative Dispute Resolution.
The Duke case is pending before Judge Catherine C. Eagles of the U.S. District Court for the Middle District of North Carolina. Eagles certified the case as a class action in 2018 after largely denying the school’s motion to dismiss in 2017.
Schlichter Bogard & Denton LLP, and Puryear & Lingle PLLC represent the Duke workers. Alston & Bird LLP, and Morgan Lewis & Bockius LLP represent Duke.
The case is Clark v. Duke Univ., M.D.N.C., No. 1:16-cv-01044-CCE-LPA, motion for settlement approval 1/16/19.