University of Pennsylvania has agreed to settle a complaint filed by current and former participants in a university 403(b) plan who alleged ERISA violations regarding fees and plan management.
The agreement was announced Dec. 1 in a brief notice issued by U.S. District Judge Gene E.K. Pratter in Philadelphia.
Terms of the settlement were not disclosed, but details are expected by Jan. 14 in the case of Jennifer Sweda et al. vs. Jack Heuer et al. Ms. Sweda is one of the participants; Mr. Heuer is vice president of human resources for the University of Pennsylvania.
The participants sued in 2016 alleging seven ERISA violations. Ms. Pratter dismissed all allegations in September 2017. The participants appealed.
The 3rd U.S. Circuit Court of Appeals in Philadelphia ruled in May 2019 that Ms. Pratter had erred in applying a proper standard of review for two of the seven complaints, sending the case back to her.
The appeals court panel ruled 2-1 that plaintiffs had "plausibly stated a claim" when they accused plan managers of paying excessive administrative fees and failing to "comprehensively review" plan management.
The appeals court also said plaintiffs "plausibly stated a claim" in their contention that plan fiduciaries had failed to use the plan's size to negotiate lower fees and kept high-cost investment options when cheaper, better-performing investment options were available.
The university petitioned the U.S. Supreme Court in December 2019, saying the appeals court ruling conflicted with rulings by several other appeals courts. The Supreme Court declined to review the case.
The University of Pennsylvania Matching Plan had $4.42 billion in assets as of Dec. 31, 2018, according to the latest Form 5500 filing.