In a rare jury trial for an ERISA lawsuit, Yale University has defeated claims by participants in a 403(b) plan that they suffered financial harm due to the plan's mismanagement.
The initial lawsuit was filed in August 2016 in the case of Vellali et al. vs. Yale University et al.
The federal jury in Hartford, Conn., unanimously voted late Wednesday on several allegations against the university and its fiduciaries, including one in which jurors said defendants "breached their duty of prudence by allowing unreasonable record-keeping and administrative fees" to be charged to participants, according to a court document describing the jury's deliberations.
However, the jurors voted that the plaintiffs didn't prove any damages resulting from the record keeping, the document said. They also agreed with the defendants' assertion that there were no damages.
The jurors also voted that the defendants proved that "a fiduciary following a prudent process could have made the same decisions as to record-keeping and administrative fees as the defendants."
Among the other claims by plaintiffs, the jurors rejected:
- The allegation that defendants violated ERISA by failing to "appropriately monitor" the plan's investment lineup.
- The argument that defendants breached their ERISA duty of prudence by "failing to select appropriate share classes" for certain plan investments.
- The allegation that defendants "imprudently agreed" to a requirement by TIAA-CREF that a plan offering the TIAA Traditional Annuity must also offer the CREF Stock Account. (TIAA-CREF wasn't a defendant.)
The Yale University Retirement Account Plan, New Haven, Conn., had $7.1 billion in assets as of Dec. 31, 2021, according to the latest Form 5500.