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A lawsuit challenging the fees and investment options in Princeton University’s retirement plan will be put on hold until a federal appeals court considers a similar case against the University of Pennsylvania.
A federal judge in New Jersey paused the Princeton case from moving forward until the U.S. Court of Appeals for the Third Circuit decides an appeal by Penn employees who raised a similar challenge to their retirement plan. The judge said the Third Circuit’s ultimate ruling in that case “directly bears” on how the Princeton case is resolved.
This move is a blow for the Princeton employees and retirees, who accused the plan’s trustees of “litigation gamesmanship” for their attempt to get the case paused. The Penn and Princeton retirement plans are two of more than a dozen college retirement plans to be hit with proposed class actions in recent years. So far, Penn is the only school to defeat one of these cases outright, with judges allowing similar challenges to proceed against Cornell, Columbia, Duke, Emory, New York University, Johns Hopkins, and the University of Chicago.
These lawsuits say the schools’ retirement plans offered high-fee, poorly performing investment options and paid excessive administrative fees. Many cases also challenge plans that use multiple plan record keepers, which employees say is a waste of money.
In addition to pausing the Princeton lawsuit, the judge also refused to reconsider her earlier ruling that allowed several claims to proceed. Because the Third Circuit may make changes to the law when it considers the Penn case, it would be “unwise” for the judge to disturb her prior ruling at this time, she said.
Judge Anne E. Thompson of the U.S. District Court for the District of New Jersey wrote the unpublished decision.
Lite DePalma Greenberg LLC represents the Princeton employees. Proskauer Rose LLP represents Princeton’s trustees.
The case is Nicolas v. Trs. of Princeton Univ. , 2017 BL 455755, D.N.J., No. 3:17-cv-03695-AET-DEA, unpublished 12/19/17 .
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