A federal judge in Orlando, Fla., has rejected a petition by Embry-Riddle Aeronautical University to dismiss a lawsuit alleging ERISA violations by a participant in a 403(b) plan.
The plaintiff accused Embry-Riddle — a private university in Daytona Beach, Fla. — of offering poor-performing and excessively expensive investments and failing to adequately review the investment-selection process.
"Plaintiff has plausibly alleged a breach of prudence, at minimum based on recordkeeping expenses and a failure to invest in virtually identical lower-cost share-classes," U.S. District Court Judge Paul G. Byron wrote on July 12.
The complaint in the case of Lopez vs. Embry-Riddle Aeronautical University Inc. was filed in September 2022, seeking class-action status.
"Defendant failed to have a proper system of review in place to ensure that participants in the plan were being charged appropriate and reasonable fees for each of the plan's investment options," the complaint stated. "Defendant also caused the plan and its participants to pay excessive administration fees and excessive compensation to service providers."
The Embry-Riddle Aeronautical University DC Retirement Plan, Daytona Beach. Fla., had assets $559.6 million in assets as of Dec. 31, 2021, according to the latest Form 5500.