United States District Court, S.D. New York
MEMORANDUM DECISION & ORDER
KATHERINE B. FORREST, UNITED STATES DISTRICT JUDGE.
individually and as the representatives of a class, have
alleged that Columbia University (“Columbia”)
violated sections 404 and 406 of the Employee Retirement
Income Security Act (“ERISA”), 29 U.S.C.
§§ 1104 and 1106 (2012). The instant action is one
of a number of cases filed in district courts across the
country by the same counsel alleging that university pension
plans, known as “403(b) plans, ” typically with
significant assets, have not been managed prudently or for
the exclusive purpose of providing benefits to participants
and their beneficiaries, in violation of ERISA. The Court
recently issued a decision on a similar motion with regard to
New York University's Plan. (Sacerdote v. New York
Univ., 16-CV-6284-KBF (S.D.N.Y. August 25, 2017).)
Here-as in the NYU case- plaintiffs allege a wide array of
acts or omissions by Columbia that they assert amount to
serious ERISA violations with regard to two 403(b) plans.
ERISA requires, inter alia, that Columbia comply with its
fiduciary obligation to administer the Plans solely in the
interest of Plan participants and to act prudently.
pending before the Court is defendants' motion to dismiss
plaintiffs' Consolidated Amended Complaint. (ECF No. 81.)
For the reasons set forth here, and more extensively in this
Court's decision in Sacerdote, this motion is
GRANTED in part and DENIED in part.
University offers two retirement plans to its faculty and
employees: the Retirement Plan for Officers of Columbia
University (“Officers Plan”) and the Columbia
University Voluntary Retirement Savings Plan
(“VRSP”) (together, the “Plans”).
(Consol. Am. Compl. (ECF No. 52) ¶ 9.) The Plans are
both defined contribution, individual account, employee
pension benefit plans under 29 U.S.C. § 1002(2)(A) and
§ 1002(3). The Officers Plan is funded by Columbia on
employees' behalf, while the VRSP is funded by
employees' elective contributions. (Id. ¶
11.) Each plan is allegedly known as a “jumbo plan,
” and each is in the largest 0.06% of all defined
contribution plans in the United States. (Id.) About
20, 000 employees of Columbia have accounts in both Plans,
and about an additional 7, 000 are enrolled in just the
Officers Plan. (Id. at ¶ 12.) Like NYU's
plans, the Plans at issue here are maintained by Vanguard and
TIAA-CREF and share many of the same characteristics.
Columbia Plans offer “identical investment
menu[s]” made up of 116 investment options
(“Options”). (Id. ¶ 100.)
Defendants select which Options are included in the Plans,
and participants “elect how to allocate [their]
contributions by selecting from a menu of Plan investment
options.” (Id ¶ 99.) Many Plans offer
multiple share classes, as well as the TIAA Traditional
Annuity. (Id. ¶¶ 101-02.) According to the
Consolidated Amended Complaint, TIAA-CREF requires that NYU
include its proprietary investment products in the Plans and
retain its record keeping services.
in this action allege that defendants violated ERISA in the
• Breaching the fiduciary duty of loyalty (Counts I,
III, and V, in part);
• Breaching the fiduciary duty of prudence (Counts I,
III, and V, in part);
• Engaging in prohibited transactions (Count II, IV, and
• To the extent Columbia delegated its fiduciary duties,
failing to monitor its delegates (Count VII).
Am. Compl. ¶¶ 207-258.) For the same reasons as
those set forth in Sacerdote, the Court grants a
dismissal of all but the prudence claims in Counts III and V.
While the Plans in this case and in Sacerdote vary
at the margins-for example, these Plans have more investment
Options, and the ways in which employees enroll in the Plans
differ-no difference is material to the claims at
hand. Defendants' allegations under the
statute of limitations survive as well, as the Court does not
have enough information to rule on them at this stage-a
fuller record is necessary. (ECF No. 82 at 23-25.)
Court notes, however, that plaintiffs here state an
additional allegation in Counts I-VI not present in the
complaint in Sacerdote: that “[e]ach Defendant
knowingly participated in the breach of the other Defendants,
knowing that such acts were a breach, enabled the other
Defendants to commit a breach by failing to lawfully
discharge its own fiduciary duties, knew of the breach by the
other Defendants and failed to make any reasonable effort
under the circumstances to remedy the breach. Thus, each
Defendant is liable for the losses caused by the breach of
its co-fiduciary under 29 U.S.C. § 1105(a).”
(Consol. Am. Compl. ¶¶ 212, 218, 227, 232, 246,
251.) In the event a ...