The trustees of Princeton University agreed to pay $5.8 million to settle an ERISA complaint filed by a participant in two university 403(b) plans.
In addition to the money, the university promised to keep record-keeping fees constant for three years starting when a U.S. District Court judge approves the agreement, according to the proposed settlement document filed Tuesday in the U.S. District Court of Newark, N.J.
The university also will "use commercially reasonable best efforts" to reduce record keeping fees as well as conduct an RFP for record-keeping services and for outside independent investment consulting services, said the document in the case of Nicolas vs. The Trustees of Princeton University.
The university, which admitted no wrongdoing, also agreed to meet with its independent investment consultant at least four times a year — for five years — "to evaluate expense and performance of each investment option in the plans, to review and consider changes to the investment option line-up" as well as costs and expenses, the document said.
The parties announced a preliminary settlement in April, but didn't disclose terms at that time.
Plaintiff Elysee Nicolas sued the university's trustees in May 2017 alleging, among other things, that the university fiduciaries allowed the plans to charge "unreasonable and excessive fees for investment and administrative services."
The complaint also criticized the plans' use of revenue-sharing when dealing with its two record keepers, TIAA-CREF and Vanguard Group.
The settlement will cover all participants and beneficiaries who had an account balance in either the Princeton University Retirement Plan or the Princeton University Retirement Savings Plan from May 24, 2011, through the date of preliminary court approval.
The combined assets of the two 403(b) plans was $2.28 billion as of Dec. 31, 2018, according to the latest Form 5500 filings.