Federal Judge Approves $5 Million Settlement In ERISA Case Against TIAA
A federal judge approved a settlement that will award employees and retirees of TIAA $5 million and institute significant reforms for their retirement plan. The plaintiffs — represented by Gregory Porter of Bailey Glasser’s Washington, D.C., office and Mark G. Boyko of the firm’s St. Louis, Missouri, office — alleged TIAA violated the federal Employee Retirement Income Security Act (ERISA) by forcing participants in its 401(k) and retirement plans into funds managed by TIAA, an investment firm, even though better-performing and lower-cost funds were available.
“In addition to the $5 million settlement fund, the settlement requires TIAA to open up their plans to new, low-cost investments, moving the plans forward and protecting the retirement savings of TIAA’s employees,” said Porter.
At the end of the year, plans will begin offering non-proprietary investment options and a brokerage window that will allow participants to choose from a large number of proprietary and non-proprietary mutual funds.
U.S. District Judge Kevin Castel of the Southern District of New York issued an order Friday afternoon granting final approval to the settlement, which was reached after two years of litigation.