Divane v. Northwestern University, No. 18-2569 (7th Cir. 2020)Annotate this Case
Under the Retirement Plan, participating Northwestern University employees can contribute a portion of their salary to their account and Northwestern makes a matching contribution. Employees participating in the Voluntary Savings Plan also contribute a portion of their salary, but Northwestern does not make a matching contribution. Both plans allow participants to choose the investments for their accounts from options assembled by the plans’ fiduciaries. Northwestern is the administrator and designated fiduciary of both plans. The plaintiffs sued Northwestern under the Employee Retirement Income Security Act, 29 U.S.C. 1001 (ERISA).
The Seventh Circuit affirmed the dismissal of the amended complaint and rejection of the plaintiffs’ demand for a jury trial. Under the plans, no participant was required to invest in any particular product. Any participant could avoid the alleged problems with certain products--record-keeping fees and underperformance. Northwestern provided a wide range of investment options and provided prudent explanations for the challenged fiduciary decisions involving alleged losses. There was no ERISA violation with Northwestern’s record-keeping arrangement; the plaintiffs identified no alternative recordkeeper that would have accepted any fee lower than what was paid nor have they explained how a hypothetical lower-cost recordkeeper would perform at the level necessary to serve the best interests of the plans.