Divane v. Northwestern University

Dist. Ct. did not err in granting defendant-plan administrator’s motion to dismiss in ERISA action by plaintiffs-beneficiaries of employee investments plans by: (1) providing plaintiffs with too many investment options that left average investor unable to select appropriate investment option(s); (2) offering TIAA-CREF Traditional Annuity that required plan to also offer TIAA-CREF Stock Account fund and use TIAA as recordkeeper for all TIAA offerings, where Stock Account charged excessive fees and did not historically perform well; and (3) failing to apply flat $35 fee for recordkeeping costs for each plan. Record showed no ERISA violation, where no investor was required to invest in Stock Account or any other TIAA account, and allegations in plaintiffs’ complaint depicted valid reasons for plan to use TIAA as record keeper and to keep Stock Account, since Stock Account offered Traditional Annuity that was attractive to plan participants. Moreover, ERISA does not mandate what kind of benefits must be in plan, and plan may offer wide range of investment options without breaching any fiduciary duty. Also, ERISA does not require flat-fee recordkeeping structure or require defendant to seek sole record keeper. Too, Dist. Ct. did not err in striking plaintiffs’ jury demand where instant breach of fiduciary claim asserted only equitable remedy.