A New York federal district court judge has ruled that an amended ERISA complaint based on a breach of fiduciary duty against the Teachers Insurance & Annuity Association of America (TIAA) may proceed after it was originally dismissed in 2022. The judge agreed that the complaint contained sufficient evidence of TIAA, a wealth management and investment firm, systematically cross-selling its adviser-managed account service, Portfolio Advisor, which came with higher fees for participants who chose this option rather than remaining invested in the plan.
Plan participants claim that TIAA breached its duties under the Employee Retirement Income Security Act (ERISA) when it aggressively recruited them to participate in the higher-cost services. TIAA advisers allegedly cold-called plan participants to offer them free financial planning services, but allegedly with the intent of moving more participants to the higher-cost portfolios containing TIAA-affiliated funds. The move caused participants to pay fees they would not have paid had they remained in their previous plans.
The judge ordered TIAA to file its response to the amended complaint by June 21, 2024.
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