Cornell University, Ithaca, N.Y., agreed to pay $225,000 to settle a lawsuit by participants in two 403(b) plans alleging ERISA violations by the university and its fiduciaries.
If approved by a U.S. District Court judge in New York, the settlement will end more than four years of litigation in which only one of the original complaints against Cornell was subject to the settlement.
"The court dismissed or granted summary judgment on all of the plaintiffs' claims except insofar as plaintiffs alleged that the Cornell defendants breached their duty of prudence by failing to adopt the institutional share classes of the TIAA-CREF Lifecycle Funds," said a document filed Monday by the plaintiffs' attorneys describing the settlement.
The parties agreed to terms on Sept. 18, the settlement document said. A jury trial had been scheduled for Sept. 29 in the case of Cunningham et al vs. Cornell University et al.
The participants initially sued in August 2016, then amended their complaint in December 2016, alleging ERISA violations due to the charging of "unreasonable" record-keeping and administrative fees and maintaining high-cost and poor performing investment options.
The Cornell defendants dispute the allegations and deny liability for any alleged fiduciary breach," the document said.
"This settlement represents nearly full recovery on the TIAA-CREF Lifecycle Funds claim and does not settle the dismissed claims, which may be appealed," the document said.
The Cornell University Retirement Plans for the Endowed Colleges at Ithaca and the Cornell University Tax Deferred Annuity Plan had combined assets of $3.58 billion for the year ended Dec. 31, 2018, according to the latest Form 5500s.