On May 25, 2018 U.S. District Court Judge Jorge L. Alonso rendered a decision in Divane v. Northwestern University granting defendants’ motion to dismiss. The suit was brought by the law firm of Schlichter Bogard & Denton who have targeted university sponsored 403(b) plans throughout the United States for excessive fees and other breaches of fiduciary duties defined by ERISA.

Judge Alonso said that most of the plaintiffs’ allegations “constitute a description of plaintiffs’ opinions both on ERISA law and on a proper long-term investment strategy for average people who lack the time to select either individual stocks or actively-managed mutual funds”. Judge Alonso went on to say “all other things being equal, a lower expense ratio is better” but also noted “all things are not equal between funds” and that participants were given a broad array of options including low priced index funds as well as more expensive active funds.

This was the second of 403(b) university excessive fee suits to go to trial and the second in which the university prevailed. The other was against the University of Pennsylvania which was decided last September and is currently under appeal.

Regardless of the outcome of these suits, a prudent and well documented fiduciary process is a universities best defense against litigation. Last summer our ERISA attorney wrote “Lesson Plan: What colleges and universities can learn from recent TIAA-CREF excess fees settlement”.


What We Offer You

DirectAdvisors provides independent ERISA Fiduciary Investment Advisory Services and plan consulting services for 401(k) and 403(b) retirement plans. We were once third-party administrators; we use that experience to be the intermediary between you and your third-party service providers. 100% of our advisory and consulting practice revenue comes from retirement plan services. Unlike other practices that make retirement plan service a part of what they do, it is ALL that we do! And it’s what we have been doing here in Albany, New York, since 2001.

Think of us as the quarterback to your retirement plan. We help you to manage all of the pieces so you don’t have to. Retirement plans (401(k), 403(b), Defined Benefit Cash Balance) have lots of moving parts: plan documents, custodians, recordkeepers, third-party administrators, investment decisions, employee counseling, etc. As experts with decades of experience, we will save you time and money and make the right choices the first time.