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Divane v. Northwestern Univ.


On January 22, 2019, the Pension Rights Center joined the AARP Litigation Foundation in filing a friend-of-the-court brief in the U.S. Court of Appeals for the Seventh Circuit in Divane v. Northwestern Univ. The brief asked the Court to overturn the decision of the U.S. District Court for the Northern of Illinois that had dismissed the case. Several participants in two nonprofit retirement plan known as 403(b) plans sued the administrator of the plan. They claimed that the plan provided over 200 investment options – too many to allow the plan administrator “to monitor all investment options and to remove poorly performing and unreasonably high fee options when it [was] prudent to do so.”  The U.S. District Court had not allowed the case to go forward to determine whether the plan administrator was at fault because they had not provided sufficient details about the plan administrator’s processes and methods for managing the plans. The brief pointed out that the case has important implications for the protection of retirement savings. “Preventing plan participants from enforcing their rights under ERISA due to a failure to plead facts unattainable to them and solely in the possession of plan fiduciaries, undermines Congress’s intent when it passed ERISA and will hinder the overall enforcement of ERISA, thereby further increasing the risk that individual workers face when entrusting plan administrators with their savings.”

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