On Tuesday, District Court Judge Katherine B. Forrest handed NYU a victory over a group of its employees in Sacerdote v. NYU. Employees sued the university in a class-action case in March over allegedly mismanaging faculty retirement plans.
The case was tried over the course of eight days in April in a lower Manhattan courthouse. Plaintiffs — six professors representing multiple NYU colleges — were represented by Jerome Schlichter, a leader in retirement plan fee litigation and managing partner at the Manhattan law firm Schlichter, Bogard and Denton. In court, Schlichter argued that NYU’s fiduciary mismanagement caused retirement plan holders to collectively lose hundreds of millions of dollars.
“While the court finds the level of involvement and seriousness with which several committee members treated their fiduciary duty troubling, it does not find that this rose to a level of failure to fulfill fiduciary obligations,” Forrest wrote in a 78-page decision.
From the evidence presented, Forrest found that the plaintiffs failed to prove NYU incorrectly maganged the recordkeeping fees and also failed to prove that such actions resulted in monetary loss.
Marcia S. Wagner — Principal of the Wagner Law Group and nationally recognized attorney in duties related to the Employee Retirement Income Security Act of 1974 — served as an integral witness to the case; in the court’s final decision, her testimony was cited as being highly influential to Forrest’s decision.
“[Wagner] provided expert testimony regarding NYU’s processes relating to recordkeeping fees,” the court wrote in its decision. “The Court found her experience with 403(b) plans impressive and her testimony consistent, reasonable, logical and ultimately, highly credible.”
NYU Spokesman John Beckman told WSN the university was pleased with the outcome.
“NYU maintained from the time the plaintiffs first publicized this case that it was baseless, and the judge’s finding supports that,” Beckman said. “The simple fact is that NYU is and always has been a careful, conscientious steward of the retirement plans for its employees and retirees, and the plaintiffs failed to meet their burden of proof to suggest otherwise.”
While NYU’s case was the first of Schlichter’s suits targeting universities to go to trial, he currently has nine other cases involving 403(b) plans pending in federal court. Both the University of Pennsylvania and Northwestern University cases were dismissed before a trial.
Schlichter said he would appeal the decisions on behalf of plaintiffs.
“We respectfully continue to believe that retirement plan participants at universities that operate as nonprofits have the same rights and protections under the law to build their retirement savings as workers at for-profit companies,” he said in a statement to the New York Times.