University of Miami Reaches $1.85M Deal in Employee Retirement Savings Class Action Lawsuit

By Lauren Silva | December 1, 2021

Category: 401k

university of miami" and "class action" — (Photo Credit: Barbara Kalbfleisch/Shutterstock)

University of Miami Retirement Plans Class Action Lawsuit Overview:

Why: The parties settled a class action lawsuit that accused the University of Miami of undercutting its employees’ retirement savings.
Who: The University of Miami reached a settlement with current and former employees.
Where: The class action settlement is pending in Florida federal court.

The University of Miami reached a $1.85 million settlement in a class action lawsuit that accused the school of undercutting employees’ retirement savings plans through excessive fiduciary fees and unsatisfactory investments—violating the Employee Retirement Income Security Act of 1974 (ERISA).

The settlement amount will cover cash benefits to settlement Class Members, administration costs, and the fees for an independent fiduciary. This objective fiduciary will review the settlement “on behalf of the [retirement] Plans” to ensure the settlement’s “fairness to the proposed Settlement Class.”

The four class action plaintiffs, Augustina Santiago, Lilly Leyva, Guillermo Creamer, and Maria Aceituno, seek awards of $7,000 each. Their attorneys also seek awarded fees of up to one-third of the settlement amount.

Any leftover funds will cover the administrative fees and expenses of the retirement plans in question.

Additionally, within three years after the settlement becomes effective, the plans’ fiduciaries will request proposals for recordkeeping and administrative services. Within the same timeline, the University and the plans’ fiduciaries will refrain from increasing the plans’ current contractual fees paid to Fidelity and TIAA for recordkeeping services.

In a statement, the University maintained that its retirement plans are “in compliance with all applicable laws,” and reached the settlement in order to avoid the significant costs of further litigation, as reported by Law360.

University of Miami Employee Settlement Class Benefits

Settlement Class Members are “current or former participants in the University of Miami Retirement Savings Plan and other defined contribution plans sponsored by Miami during the Settlement Class Period for which either Fidelity or TIAA-CREF (or both) serve or have served as an administrative service provider.”

Settlement payments will be made depending on the Class Member’s participation in their retirement plan.

Members with an active account in one or more retirement plans as of Aug. 31, 2021 and don’t have a zero account balance will receive automatic settlement payments directly to their plan accounts.
Members who are Zero Account Balance Current Participants will receive settlement payments via check to their address.
Members without an active plan account as of Aug. 31, 2021 will submit (electronically or by mail) a claim form to become eligible to receive a cash payment via check.

University’s Failures Led to Retirement Savings Losses, Complaint Alleged

The class action was first filed in April 2020 by the four current and former employees who accused the University of Miami of breaching its fiduciary duties.

The complaint claimed that the University failed to adequately monitor the plans, allowing them to incur excessive and unreasonable administrative fees.

The University also allegedly failed to select and monitor investment options which resulted in investment losses.

Finally, the class action lawsuit alleged that the University breached its duty to monitor appointed fiduciaries.

The university worked throughout 2020 to dismiss the class action. Movement towards a settlement began in May 2021.

Have you experienced a similar issue with your employer-sponsored retirement plan? Sign up to start a class action lawsuit!

The plaintiffs are represented by Brandon J. Hill and Luis A. Cabassa of Wenzel Fenton Cabassa, P.A.; Michael C. McKay of McKay Law, LLC; and Chad A. Justice for Justice for Justice LLC.

The University of Miami Retirement Plans Class Action Lawsuit is Santiago, et al. v. University of Miami, Case No. 1:20-cv-21784-DPG, in the US District Court for the Southern District of Florida Miami Division.