Support the ‘Prince’

Please disable ad blockers for our domain. Thank you!

dsc4359
Jon Ort / The Daily Princetonian

In a letter filed on April 14 in the class action lawsuit of Elysee Nicolas v. The Trustees of Princeton University, Nicolas’ counsel informed the court that the parties had reached an agreement. The terms of the settlement have not yet been announced. 

The lawsuit alleged that the retirement plans the University managed for its employees charged participants with excessively high administrative fees and expenses, among other related allegations. 

Although he stated that he could not discuss the terms of the settlement until it is filed with the court, University Spokesperson Ben Chang confirmed in an email to The Daily Princetonian that an agreement in principle had been reached.

“Princeton did not engage in any wrongdoing,” he wrote. “Princeton disputes the allegations made in the complaint and remains confident it would have prevailed in litigation.”

“We believe that the settlement is in the best interests of all of the parties involved and resolves this matter amicably without additional expenditures on the defense of the lawsuit,” he added.

Nicolas did not respond to requests for comment, and Nicolas’ attorneys of record, Eric Lechtzin and Joseph J. DePalma, declined to comment and did not respond to requests for comment, respectively.

The complaint that gave rise to the lawsuit was filed in May 2017 by Nicolas, a staff member of the University’s grounds crew. Nicolas sought legal relief both individually and as a representative of “a class of participants and beneficiaries on behalf of the Princeton University 403(b) Plan.” 

The class action suit alleged that the University had committed “breach of fiduciary duties under the Employee Retirement Income Security Act.” Under the act, the complaint claimed, the University was “obligated to act for the exclusive benefit of participants and beneficiaries” in managing the retirement plans of its employees. 

The complaint stated that, in the plaintiff’s view, the University had failed to leverage the “massive bargaining power” of the retirement plans to the benefit of their participants. 

According to the complaint, the University “failed to investigate, examine and understand the real cost to Plans’ participants for administrative services, thereby causing the Plans to pay unreasonable and excessive fees for investment and administrative services.”

The complaint went on to allege that the University had retained investment options for the Plans that “historically and consistently underperformed their benchmarks and charged excessive investment management fees.” 

In August 2017, the University filed a motion to dismiss the lawsuit, which was partially granted and partially denied in an order the next month by Judge Anne Thompson of the United States District Court for the District of New Jersey. Thompson ordered that Nicolas, the plaintiff, be granted leave to file an amended complaint within 20 days.

In October 2017, the University filed a motion to reconsider the motion to dismiss, which was denied by Thompson in December of the same year. In June 2019, the University again filed a motion to reconsider the motion to dismiss, which Thompson again denied in an August 2019 opinion.

In the letter filed last week with Magistrate Judge Douglas E. Arpert on behalf of the plaintiff, DePalma wrote, “The parties have now reached an agreement in principle on all substantive terms with respect to the settlement, including therapeutic relief,” defined legally as a form of remedy that requires the defendant to make actionable changes, as opposed to solely paying damages.

The letter added that the plaintiff anticipates providing the defendant a draft of the settlement paper by the following week. 

According to Chang, at this point, the University has agreed in principle to the terms of the settlement, which “include some changes to the way the [retirement] plans are operated.”

“The investment fund lineup has not changed, and the plans remain financially stable and well administered,” he wrote. 

According to a report by Inside Higher Ed, the announcement makes the University the seventh university to reach a settlement in a lawsuit over retirement-plan practices. Twenty similar class action lawsuits have been filed against universities since 2016, by the count of the National Association of Plan Advisors, a retirement plan adviser advocacy group. 

Of the six settlements already announced, the largest came from MIT, where the university settled for $18.1 million. Additionally, as Inside Higher Ed reported, Vanderbilt University reached a settlement of $14.5 million, Johns Hopkins University one of $14 million, Duke University one of $10.65 million, the University of Chicago one of $6.5 million, and Brown University one of $3.5 million.

Comments
Comments powered by Disqus