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Vellali v. Yale Univ.

United States District Court for the District of Connecticut

September 24, 2019, Decided; September 24, 2019, Filed

Civil No. 3:16-cv-1345(AWT)

Opinion

 [*14]  RULING ON MOTION FOR CLASS CERTIFICATION

For the reasons set forth below, the plaintiffs' motion for class certification is being granted.

I. FACTS

Yale University ("Yale") offers to eligible employees the opportunity to participate in an individual account, 403(b) defined-contribution plan (the "Plan") governed by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. Under the Plan, employees put a portion of their income into personal retirement savings accounts and invest those savings in an array of investment options. Yale makes matching contributions under certain conditions. Each of the four named plaintiffs in this [**3]  case is a current or former Yale employee and a participant in the Plan. Yale is the Plan's administrator and named fiduciary with authority to control and manage the operation and administration of the Plan.

Two key aspects of maintaining a 403(b) plan are managing the plan's investment options and providing recordkeeping for plan participants. Plan fiduciaries typically contract with third-party vendors for both of these services. The process of selecting vendors and negotiating service fees can materially affect an employee's retirement income because every dollar spent on either recordkeeping or investment management is a dollar that is not contributing to increasing the amount of the employee's retirement savings. The plaintiffs contend that, over time, excessive service fees can erode an employee's retirement savings to the tune of tens or hundreds of thousands of dollars. Throughout the proposed class period, which began August 9, 2010, the Plan has had at least 14,000 participants. It had approximately 18,000 participants as of year-end 2017.

The plaintiffs, both individually and as representatives of a class of participants and beneficiaries in the Plan, claim that defendants [**4]  Yale, Michael A. Peel ("Peel"), Yale's Vice President of Human Resources during the class period, and the Retirement Plan Fiduciary Committee violated the ERISA in three ways: (1) by breaching their fiduciary duties of prudence under ERISA (Counts I, III and V), (2) by carrying out transactions prohibited by ERISA (Counts II, IV and VI), and (3) with respect to Yale and Peel, by failing to monitor Committee members to ensure compliance with ERISA's standards (Count VII).

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333 F.R.D. 10 *; 2019 U.S. Dist. LEXIS 182201 **; 104 Fed. R. Serv. 3d (Callaghan) 1847

JOSEPH VELLALI, NANCY S. LOWERS, JAN M. TASCHNER, and JAMES MANCINI, individually and as representatives of a class of participants and beneficiaries on behalf of the Yale University Retirement Account Plan, Plaintiffs, v. YALE UNIVERSITY, MICHAEL A. PEEL, and THE RETIREMENT PLAN FIDUCIARY COMMITTEE, Defendants.

Prior History: Vellali v. Yale Univ., 308 F. Supp. 3d 673, 2018 U.S. Dist. LEXIS 122896 (D. Conn., Mar. 30, 2018)

CORE TERMS

proposed class, class member, fiduciary duty, retirement, class certification, fiduciary, funds, class representative, adjudications, plaintiffs', breached, options, savings