Duke University, Durham, N.C., has agreed to pay $10.65 million to settle claims by participants in a university 403(b) plan that fiduciaries breached their ERISA duties.
The proposed settlement, which must be approved by a U.S. District Court in Greensboro, N.C., also contains several non-monetary agreements on behalf of the university as fiduciary to the Duke University Faculty and Staff Retirement Plan. The plan had assets of $6.08 billion as of Dec. 31, 2017, according to the latest Form 5500 filing.
The plaintiffs had alleged, among other things, that the 403(b) plan paid "unreasonable" administrative expenses, maintained underperforming investment options and failed to "prudently monitor" investment options, according to the preliminary settlement proposal filed by Schlichter Bogard & Denton, the St. Louis law firm that has filed a series of ERISA lawsuits against large private universities and their 403(b) plans.
The proposed settlement covers two similar cases: Clark et al. vs. Duke University et al. was filed in August 2016, and Lucas et al. vs. Duke University et al. was filed Aug. 20, 2018.
Among the non-monetary provisions of the settlement, the university will provide plaintiffs' attorneys each year for two years a list of fees and investment options as well as a copy of the 403(b) plan's investment policy statement. By the end of this year, the university must provide to participants detailed information about new investment options.
During the third year of the settlement period, plan fiduciaries must hire an independent consultant to recommend whether plan fiduciaries should issue an RFP for record-keeping and administrative services, the settlement document said.