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U.S. District Judge Katherine Forrest of the Southern District of New York Tuesday agreed with New York University in an Employee Retirement Income Security Act suit brought by employees that alleged the trustees of university retirement accounts failed to uphold their fiduciary duties.

Forrest found that the plaintiffs failed during an April bench trial to prove that the trustees acted imprudently, or that the retirement savings plans they administered suffered losses as a result of their actions.

The class action was one of a dozen or so brought by Schlichter Bogard & Denton clients on similar ERISA grounds, and the first to go to trial, Forrest noted in her opinion.

NYU spokesman John Beckman said in a statement that the school was pleased with the outcome of the suit.

“NYU maintained from the time the plaintiffs first publicized this case that it was baseless, and the judge's finding supports that,” he said. “The simple fact is that NYU is and always has been a careful, conscientious steward of the retirement plans for its employees and retirees, and the plaintiffs failed to meet their burden of proof to suggest otherwise.”

The allegations against the school, slimmed down to two at trial from the seven in the amended complaint, focused on two specific breaches of fiduciary duty—one regarding the inability to reduce high fees from record-keeping vendors, and by allowing funds to be invested in two accounts that allegedly underperformed.

As the judge noted, the committee overseeing the funds was shown to have issues. Several members showed a level of involvement and seriousness towards their fiduciary duties that Forrest found troubling. Overall, however, the committee was able to perform its role adequately, she said, thanks to the advice and guidance of “the more well-equipped [c]ommittee members.”

To the record-keeping fees, Forrest found that the evidence at trial showed the committee had discussions about possibly consolidating its record keepers, as a way to lower fees, while also evaluating possible collateral, side services offered by the vendors that necessitated a holistic review of fees, services offered, and total value. The committee did so appropriately, Forrest found, despite allegations the requests-for-proposals process was inadequate and that certain vendors were favored over others.

The plaintiffs' second claim of improper oversight over poorly performing funds also failed,  Forrest found. The committee closely monitored the performance of the investments offered in the retirement plans, and followed recommendations the judge found were ultimately appropriate. An analysis of the funds the plaintiffs pointed to showed they ultimately performed as well as expected.

Schlichter Bogard & Denton name attorney Jerome Schlichter led the firm's representation of the NYU employees. He is also listed as an attorney on similar federal suits filed in California, Illinois, Connecticut and elsewhere.

In a statement, Schlichter suggested legal options would be reviewed regarding Judge Forrest's decision, “in order to make the NYU employees and retirees financially whole.”

“We respectfully continue to believe that retirement plan participants at universities that operate as nonprofits have the same rights and protections under the law to build their retirement savings as workers at for-profit companies,” Schlichter said. “We also continue to believe, from the unanimous ruling by the U.S. Supreme Court in Tibble v. Edison, that placing high-priced retail funds in the NYU multibillion-dollar plans is a fiduciary breach and the fees charged were excessive.”

NYU was represented by DLA Piper partners Mark Muedeking and Ian Taylor, along with Julie Boden Adams of NYU's Office of General Counsel.