A federal appeals court in New York has rejected a petition by participants in two Cornell University retirement plans to rehear its Nov. 14 dismissal of a lawsuit alleging ERISA violations by the university and plan fiduciaries.
In a brief Dec. 20 notice, the 2nd U.S. Circuit Court of Appeals rejected requests for a rehearing by a three-judge panel and for a hearing by all appeals court judges, in the case of Cunningham et al. vs. Cornell University et al.
The three-judge panel had unanimously supported a ruling by a U.S. District Court judge to dismiss the seven-year old lawsuit.
The judges agreed with the District Court's rejection of allegations that included conducting prohibited transactions, failing to monitor and control record-keeping costs and failing to remove underperforming investments. The District Court also rejected allegations of the plans' ERISA violations for offering higher cost retail shares of mutual funds instead of lower-cost institutional shares.
The plaintiffs in two Cornell 403(b) plans sued in August 2016 — amending the lawsuit in February 2017 — seeking class-action status.
One allegation — that the university and its fiduciaries failed to offer lower-cost shares of a target-date series — was settled for $225,000 in December 2020.
The Cornell University Retirement Plans for the Endowed Colleges at Ithaca had assets of $2.45 billion, and the Cornell University Tax Deferred Annuity Plan had assets of $1.95 billion both as of Dec. 31, 2022, according to the latest Form 5500s. Both plans are based in Ithaca, N.Y.
