The original complaint was filed in 2017 by Melissa Haley, a participant in a Washington University in St. Louis 403(b) retirement plan that permitted participants to take collateralized or non-collateralized loans.
Ms. Haley challenged the collateralized loans offered by TIAA, saying that they violated ERISA's "prohibited transactions" rules. She also sued to hold TIAA liable as a non-fiduciary "for its knowing participation in the alleged violations by her plan fiduciary," the appeals court noted. Washington University is the fiduciary, but it isn't a defendant.
Ms. Haley contended that all the interest she paid on four loans should have been credited to her account. "Instead, defendant credited a smaller amount of interest to her account and kept the remainder for itself," according to the original complaint in Haley vs. Teachers Insurance and Annuity Association.
U.S. District Court Judge J. Paul Oetken, New York, ruled in March 2018 against Ms. Haley's ERISA claim but allowed her to proceed with her non-fiduciary claim.
The judge in November 2020 agreed to support her class action certification petition covering approximately 8,000 other plans.
"TIAA argues that the district court improperly certified the multi-plan class," the three-judge appeals court panel wrote on Dec. 1.
"Her suit is unique because she is seeking to hold TIAA liable on behalf of a nationwide class of ERISA-governed plans whose members received loans under terms approved by plan administrators, without naming those administrator fiduciaries as defendants," they wrote.