Federal Judge Grants Class Certification in Lawsuit against TIAA
From the Desk of Jim Eccleston at Eccleston Law LLC:
A lawsuit filed against the Teachers Insurance and Annuity Association of America (“TIAA”) has been granted class certification by a federal district court judge, PlanSponsor.com reported. The lawsuit alleges that TIAA “unlawfully took” funds from retirement accounts in the Washington University Retirement Savings Plan.
According to the complaint, participants in the Washington University plan were offered a loan that could be taken out against a portion of the participant’s retirement account. To receive a loan, the plan participant was required to “transfer 110% of the amount of the loan from the participant’s plan account . . . to [TIAA]’s ‘Traditional Annuity,’” which served as the collateral for the loan. The lawsuit alleged that loan recipients did not receive the full interest on their collateral because TIAA took some of the interest as compensation for loan administration. According to the lawsuit, TIAA’s conduct constituted a violation of the Employee Retirement Income Security Act (“ERISA”) prohibited transaction rules.
In granting class certification, the judge noted that there were 7,926 plans at issue, which included “tens or hundreds of thousands of participants.” Additionally, the judge said there were “over 460,000 loans at issue.”
Tags: eccleston, TIAA, federal lawsuit, class certification