Wilcox v. Georgetown Univ.
United States District Court for the District of Columbia
January 8, 2019, Decided; January 8, 2019, Filed
Civil Action No. 18-422 (RMC)
If a cat were a dog, it could bark. If a retirement plan were not based on long-term investments in annuities, its assets would be more immediately accessed by plan participants. These two truisms can be summarized: cats don't bark and annuities don't pay out immediately.
Darrell Wilcox and Michael McGuire work for Georgetown University. Each man has an individual investment account in each of the two retirement plans offered by the University. They allege that Georgetown imprudently selected and retained certain investment options that caused excessively high administrative fees and that it failed to manage the plans' investments prudently, in violation of the University's fiduciary duties to the plans' participants. This type of lawsuit seems to have taken higher education by storm, with suits brought all over the country. Georgetown [*3] moves to dismiss, arguing that Plaintiffs have no standing to make some of their claims and that others fail to state a claim on which relief can be granted. The motion to dismiss will be granted as to all claims.
Georgetown University in Washington, D.C. provides two retirement plans for its faculty and staff members: the Georgetown University Defined Contribution Retirement Plan (Defined Contribution Plan) and the Georgetown University Voluntary Contribution Retirement Plan (Voluntary Plan) (collectively "the Plans"). The Plans are defined contribution, individual account employee pension plans governed by the Employee Retirement Income Security Act (ERISA) 29 U.S.C. § 1001 et seq. "[A] 'defined contribution plan' or 'individual account plan' promises the participant the value of an individual account at retirement, which is largely a function of the amounts contributed to that account and the investment performance of those contributions." LaRue v. DeWolff, Boberg & Assocs., Inc., 552 U.S. 248, 250 n.1, 128 S. Ct. 1020, 169 L. Ed. 2d 847 (2008) (citation omitted). By contrast, "a 'defined benefit plan,' generally promises the participant a fixed level of retirement income, which is typically based on the employee's years of service and compensation." Id. (citation omitted).
Georgetown contributes an [*4] amount up to ten percent (10%) of an employee's annual salary into the Defined Contribution Plan and employees can contribute, as they choose, up to three percent (3%) more to the Voluntary Plan. Each participant has his own account in each Plan and decides personally how to invest its funds across a wide array of investment options, according to individual choice. Georgetown is the designated Plan Administrator for both Plans. See 29 U.S.C. §§ 1002(2)(A), 1002(34). It manages the Plans and their assets, including selecting, monitoring, and removing investment options.Read The Full CaseNot a Lexis Advance subscriber? Try it out for free.
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2019 U.S. Dist. LEXIS 3082 *; 2019 WL 132281
DARRELL WILCOX and MICHAEL MCGUIRE, individually and as representatives of a class of participants and beneficiaries in and on behalf of the GEORGETOWN UNIVERSITY DEFINED CONTRIBUTION RETIREMENT PLAN and the GEORGETOWN UNIVERSITY VOLUNTARY CONTRIBUTION RETIREMENT PLAN, Plaintiffs, v. GEORGETOWN UNIVERSITY, et al., Defendants.
Subsequent History: Motion denied by Wilcox v. Georgetown Univ., 2019 U.S. Dist. LEXIS 89557 (D.D.C., May 29, 2019)
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