USC to pay $13M settlement in retirement plan class action

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USC retirement plan lawsuit overview: 

• Who: The University of Southern California (USC) agreed to pay $13.05 million to resolve claims it mismanaged retirement plans the university offered its faculty and staff. 
• Why: A group of nine current and former USC retirement plan participants argued the university billed them incorrectly and offered them high-cost investment options that underperformed.
• Where: The USC retirement plan lawsuit was filed in California federal court.

The University of Southern California (USC) agreed to pay $13.05 million to resolve class action claims it mismanaged retirement plans the school offered its faculty and staff. 

A group of nine current and former USC retirement plan participants accused USC of wrongfully billing its retirement plan participants with duplicate service costs and offering investment choices that both underperformed and cost more, the Daily Trojan reports. 

Current USC retirement plan participants and authorized former retirement plan participants will reportedly be eligible to benefit from the class action settlement via either a check or a contribution to their retirement account plan, according to the USC class action settlement.

The group first filed its claims against the university in August 2016, arguing at the time that the school violated the Employee Retirement Income Security Act (ERISA), the Daily Trojan reports. 

USC reportedly denied it committed any misconduct or liability while seeking arbitration instead of a trial and arguing the current and former employees signed employment agreements stipulating such. 

California federal judge denies USC’s request for arbitration

The California federal judge overseeing the complaint denied USC’s arbitration request, meanwhile, with the decision later upheld by the Ninth Circuit in 2018, the Daily Trojan reports. 

USC also reportedly argued against class certification, with the university claiming the way the school managed its retirement plans had not affected all of the plan participants in the same way. 

The university offers two retirement plans, including a 401(a) Defined Contribution Retirement Plan and a 403(b) Tax-Deferred Annuity Plan, the Daily Trojan reports.  

In addition to providing the monetary compensation, USC also reportedly agreed to — within 180 days of the settlement’s effective date — complete a request for proposal for record keeping and administrative services, according to the USC class action settlement.

Last year, Coriant agreed to pay $1 million in a similar class action settlement that resolved claims the telecommunications company violated ERISA with the way it administered its 401(k) retirement plans. 

Have you had a retirement plan mismanaged by a current or former employer? Let us know in the comments. 

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