Schlichter Bogard & Denton, a nationally recognized law firm based in St. Louis, today filed a preliminary settlement approval motion on behalf of 20,000 University of Pennsylvania (“Penn”) employees and retirees in their suit against the university involving their 403(b) retirement plan.

The complaint, Sweda et al. v. The University of Pennsylvania et al., was originally filed in 2016 in the U.S. District Court for the Eastern District of Pennsylvania. The case was among the first 403(b) cases ever filed against a university alleging excessive fees. Plaintiffs alleged that Penn breached its fiduciary duty under the Employment Retirement Income Security Act (“ERISA”) by, among other things, permitting the plans to charge participants excessive recordkeeping fees and retaining underperforming investments in the plans' lineups.

The settlement terms include the creation of a $13 million settlement fund for the plaintiffs and substantial non-monetary relief, including a requirement that Penn conduct a Request for Proposal for bids on recordkeeping fees, a fixed fee for administrative services, and to prohibit recordkeepers from cross-selling its financial products to plan participants. Additionally, Penn agreed to a three-year monitoring period during which Schlichter Bogard & Denton will monitor compliance.

“This settlement includes both financial compensation and valuable non-monetary improvements to Penn’s retirement plan going forward. We are confident that these critical changes will better enable Penn employees and retirees to build their retirement assets for the future,” said Schlichter Bogard & Denton founding and managing partner Jerry Schlichter.

Schlichter Bogard & Denton pioneered excessive fee 401(k) and 403(b) litigation on behalf of workers and retirees. In 2009, the firm won the first full trial of a 401(k) excessive fee case against ABB. The firm’s Tibble v. Edison is the first and only 401(k) excessive fee case to be argued before the United States Supreme Court. On May 18, 2015, the firm won a landmark unanimous 9-0 decision in which both the AARP and the Solicitor General wrote supporting briefs for the plaintiffs.

Jerry Schlichter and his firm have been referred to by federal judges as “preeminent” in the field of 401(k) fee litigation; as demonstrating “extraordinary skill and determination;” as making “a significant, national contribution” having “educated plan administrators, the Department of Labor, [and] the courts” about fees and fiduciary obligations; and has been referred to by federal judges as a “private attorney general,” and having had a “humongous effect” in causing fees to come down by over $2 billion annually across the entire 401(k) industry.

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