Daugherty v. University of Chicago
Frequently Asked Questions

Frequently Asked Questions about the Settlement

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Questions

Answers

1. What is this Lawsuit about?

Answer:

A lawsuit was filed in the United States District Court for the Northern District of Illinois against the University. The lawsuit alleges that the University violated ERISA with respect to the Plans. The individuals who are pursuing the lawsuit (“Plaintiffs”) claim that the University should not have selected and maintained the CREF Stock Account and TIAA Real Estate Account as investment options in the Plans, and that the Plans paid higher recordkeeping and administrative fees than necessary to the Plans’ recordkeepers. Plaintiffs also previously claimed that loans made under the participant loan-program constituted prohibited transactions under ERISA, but the court dismissed that claim.

The University denies the allegations in the lawsuit and contends that its conduct was entirely proper. The University has asserted, and would assert should the litigation continue, a number of defenses to Plaintiffs’ claims.

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2. What is a class action lawsuit?

Answer:

In a class action lawsuit, one or more people called “class representatives” sue on their own behalf and on behalf of other people who have similar claims. One court resolves all the issues for all class members in a single lawsuit. Two ERIP participants and one CRP participant are the class representatives in this lawsuit.

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3. Why is there a Settlement?

Answer:

The parties have agreed to the Settlement after extensive negotiations. By agreeing to the Settlement, the parties avoid the costs and risks of further litigation, and Plaintiffs and the other members of the settlement classes will receive compensation and other benefits. Class Counsel have conducted a review of the evidence in the case and the potential risks and benefits of continued litigation and believe that the Settlement is in the best interest of the class. The Court has not made any finding that the University has done anything wrong or violated any law or regulation.

The Plans have retained an independent fiduciary to evaluate the fairness of the Settlement. The independent fiduciary is Nicholas L. Saakvitne, Esquire.

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4. How do I get more information about the Settlement?

Answer:

The Class Notice is only a summary of the lawsuit and the proposed Settlement. It is not a complete description of the lawsuit or the proposed Settlement. You may inspect the pleadings and other papers (including the Settlement Agreement) that have been filed in this lawsuit at the office of the Clerk of the United States District Court for the Northern District of Illinois, which is located at 219 S. Dearborn Street, Chicago, IL 60604. You may also review documents electronically through Public Access to Court Records, which is available as www.pacer.gov. 

If you have questions about this notice or the proposed Settlement, you may contact Class Counsel (see answer to Question 10, below, for contact information).

Do not contact the Court or the Defendant for information about the Settlement.  The Settlement Administrator or Class Counsel can answer any questions you may have about the proposed Settlement.

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5. What does the Settlement provide?

Answer:

Plaintiffs and the University have agreed to a settlement that involves both monetary payments to participants and the University’s commitment to maintain recent changes it made to the Plans’ investment options and fees. These and other terms of the Settlement are set forth in the Class Action Settlement Agreement dated May 23, 2018 (“Settlement Agreement”) and described briefly below.

 

As part of the Settlement, the University has agreed to make a one-time payment of $6.5 million (the “Settlement Amount”). After deduction from the Settlement Amount for any amounts that the Court approves for settlement-related expenses (including a Case Contribution Award to Plaintiffs, Attorneys’ Fees and Expenses to Class Counsel, certain fees for retaining an Independent Fiduciary Fees, Administration Costs, and Taxes and Tax-Related Costs), the remaining amount (known as the “Distributable Settlement Amount”) will be distributed to Monetary Relief Class Members. Monetary Relief Class Members are participants and beneficiaries of the Plans from May 18, 2011 through May 23, 2018. However, to avoid disproportionate expenses in particular cases, the parties have agreed that no distribution will be made to any Monetary Relief Class Member who (1) is no longer a participant in either of the Plans and (2) would otherwise be entitled to an amount of less than $25 from the Distributable Settlement Amount. Monetary Relief Class Members who remain participants of either of the Plans are not be subject to this restriction. The Plan of Allocation is attached to the Class Notice as Appendix A.

 

In addition to the monetary payment, the University has agreed to maintain the following changes it recently made to the Plans and other University retirement plans before agreeing to the settlement, subject to any changes in applicable law:

 

  1. The University has agreed not to increase per-participant recordkeeping fees for three years, and will use commercially reasonable best efforts to continue to attempt to reduce recordkeeping fees.

     

  2. As of April 2, 2018, the CREF Stock Account is no longer offered as an investment option available to participants in the investment lineup of the Plans and other University 403(b) retirement plans.


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6. If I am entitled to a distribution, how will I receive the settlement proceeds?

Answer:

Monetary Relief Class Members who have a positive balance in their Plan account at the time of the distribution will receive any settlement proceeds through a deposit into their Plan account. To the extent feasible and ascertainable, those settlement proceeds will be invested in accordance with each Monetary Relief Class Member’s instructions for investment of new contributions at the time the distribution is made, or, if no such instructions are in effect, to the applicable qualified default investment option. Monetary Relief Class Members who no longer have a positive balance in their Plan account as of the date of distribution (“Former Participants”) will receive a check from the Settlement Administrator.

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7. How will I benefit from the Settlement?

Answer:

You may benefit in two ways. First, you may be entitled to receive a portion of the Distributable Settlement Amount. Only Monetary Relief Class Members are eligible to receive a portion of the Distributable Settlement Amount. (See the answer to Question 6 above.) Whether or not a person meets this definition will be based on the Plans’ records. You were sent the Class Notice because, based on the Plans’ records, you are believed to be a member of the Monetary Relief Class. The Plan of Allocation attached to this notice will determine the amount paid to each eligible participant.

Second, if you are a current participant in the University’s 403(b) plans, you will receive the benefit of the changes that recently became effective and that the University has agreed to maintain (described in the answer to Question 6 above). Among other things, the University has agreed not to increase per-participant recordkeeping fees for three years and has discontinued offering the CREF Stock Account as an investment option in the Plans’ investment lineup.

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8. What are the Class Representatives receiving from the Settlement?

Answer:

Each of the Class Representatives in this case may seek a Case Contribution Fee not to exceed $10,000. Additionally, the Class Representatives will be entitled to receive benefits of the Settlement because they are Monetary Settlement Class Members.

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9. What do I give up by participating in the Settlement?

Answer:

In exchange for the University’s payment of the Settlement Amount, all Monetary Relief Class Members will release any claims they have related to the lawsuit and be prohibited from bringing or pursuing any other lawsuits or other actions based on such claims.

The Court will also be certifying as a class all persons who are participants of the Plans from the date of the Court’s preliminary approval of the Settlement until three years after that date. These persons are known as the Structural Changes Class Members. Structural Change Class Members and Monetary Relief Class Members are collectively known as Settlement Class Members. Structural Changes Class Members are agreeing not to sue (the “Covenant”) the University and certain other parties (defined in Sections 1.13, 1.14, 1.15 and 6.2 of the Settlement Agreement) with respect to any of the subjects for which changes have been made to the operation of the Plans (described in the answer to Question 6 above), so long as the Plans (a) do not raise the per-participant recordkeeping fees for the next three years and (b) continue to conduct periodic reviews of the investment options in the new investment lineup, including the TIAA Real Estate Account. This Covenant expires at the end of the calendar year occurring three years after the Court’s final approval of the Settlement. The Releases and the Covenant are set forth in full in the Settlement Agreement, which can be viewed in the 'Documents' section of this website or requested from Class Counsel.

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10. Do I have a lawyer in this case?

Answer:

Yes. In granting preliminary approval of the proposed Settlement, the Court appointed the Plaintiffs’ lawyers to serve as “Class Counsel” for the Settlement Class. The attorneys for the Settlement Class are as follows:

John J. Nestico
SCHNEIDER WALLACE COTTRELL KONECKY WOTKYNS, LLP
8501 N. Scottsdale Road
Suite 270
Scottsdale, AZ 85253

Todd Collins 
Ellen Noteware
BERGER & MONTAGUE P.C.
1622 Locust Street
Philadelphia, PA 19103

Mark Richard Miller
WEXLER WALLACE LLP
55 W. Monroe Street
#3300
Chicago, IL 60603

You will not be charged separately for the work of these lawyers; their compensation will come from the Settlement Amount and will be determined by the Court. If you want to be represented by a different lawyer in this case, you may hire one at your own expense.

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11. How will the lawyers (Class Counsel) be paid?

Answer:

Class Counsel will file a motion with the Court seeking approval of their compensation, which will consist of (a) reasonable attorneys’ fees and (b) reimbursement of the expenses they incurred in prosecuting the case. Class Counsel intend to seek attorneys’ fees equal to 30% of the Settlement Amount plus reasonable expenses. The motion and supporting papers will be filed on or before August 15, 2018. After that date you may review the motion and supporting papers at under the Important Documents section of this website. Any attorneys’ fees, expenses and Case Contribution Award approved by the Court, in addition to the fee and the expenses incurred by the Settlement Administrator in sending this notice and administering the Settlement, will be paid from the Settlement Amount. The University will pay the costs of the independent fiduciary up to $25,000, and any amount in excess of $25,000 will be paid from the Settlement Amount.

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12. What does it mean to object?

Answer:

Objecting is simply telling the Court that you do not like something about the Settlement. Objecting will not have any bearing on your right to receive the benefits of the Settlement if it is approved by the Court.

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13. What is the procedure for objecting to the Settlement?

Answer:

Prior to the Fairness Hearing, Settlement Class Members will have the opportunity to object to approval of the Settlement. Settlement Class Members can object to the Settlement and give reasons why they believe that the Court should not approve it. To object, you must send your objection to the Court, at U.S. District Court, Northern District of Illinois, 219 S. Dearborn Street, Chicago, IL 60604, and to the Parties at the following addresses:

To Class Counsel:

John J. Nestico
SCHNEIDER WALLACE COTTRELL KONECKY WOTKYNS, LLP
8501 N. Scottsdale Rd.
Suite 270
Scottsdale, AZ 85253


To Defendant’s Counsel:

Mark B. Blocker
SIDLEY AUSTIN LLP
One South Dearborn Street
Chicago, IL 60603

Objections must be filed with the Court Clerk on or before August 22, 2018. Objections filed after that date will not be considered. Any Settlement Class Member who fails to submit a timely objection will be deemed to have waived any objection they might have, and any untimely objection will be barred absent an order from the Court. Objections must include: (1) the case name and number; (2) your full name, current address, telephone number and signature; (3) a statement that you are a Settlement Class Member and an explanation of the basis upon which you claim to be a Settlement Class Member; (4) all grounds for the objection, accompanied by any legal support known to you or your counsel; (5) a statement as to whether you or your counsel intends to personally appear and/or testify at the Fairness Hearing; and (6) a list of any persons you or your counsel may call to testify at the Fairness Hearing in support of your objection.

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14. What if I do not want to be part of the lawsuit and want to exclude myself?

Answer:

The Settlement does not allow any Settlement Class Members to exclude themselves from the settlement or decide not to be a part of the Settlement. While some class action settlements allow class members to “opt out” of the settlement if they want, because of the nature of the claims Plaintiffs have asserted in this lawsuit, Settlement Class Members do not have any right to opt out. Thus, if you dislike some portion of the settlement, your only recourse is to object to the settlement.

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15. What is a fairness hearing?

Answer:

The Court has granted preliminary approval of the proposed Settlement, finding that it is sufficiently reasonable to warrant such preliminary approval, and has approved delivery of this notice to Settlement Class Members. The Settlement will not take effect, however, until it receives final approval from the Court following an opportunity for Settlement Class Members to object to the Settlement. Following the deadline for objecting to the Settlement, the Court will hold a Fairness Hearing on September 12, 2018 to consider any objections. The Fairness Hearing will take place at 1:00 p.m. at the United States District Court for the Northern District of Illinois, located at 219 S. Dearborn Street, Chicago, IL 60604. The date and location of the Fairness Hearing is subject to change by Order of the Court, which will appear on the Court’s docket for this case.

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16. Can I attend the Fairness Hearing?

Answer:

Yes, anyone can attend the Fairness Hearing. But the Court will only allow those who file and serve a timely written objection in accordance with this notice to speak at the Fairness Hearing either in person or through counsel retained at his or her own expense. Those persons or their attorneys intending to speak at the Fairness Hearing must serve notice of their intention to appear setting forth on Class Counsel and Defendant’s counsel (at the addresses set out above) and file it with the Court Clerk by no later than August 22, 2018. The notice must include: (1) the name, address, and telephone number of the Settlement Class Member, and (2) if applicable, the name, address, and telephone number of that Settlement Class Member’s attorney. Anyone who does not timely file and serve a notice of intention to appear in accordance with this paragraph shall not be permitted to speak at the Fairness Hearing, except by Order of the Court for good cause shown. Any comment or objection that is timely filed will be considered by the Court even in the absence of a personal appearance by the Settlement Class Member or that Settlement Class Member’s counsel.

The Court will consider Settlement Class Member objections in deciding whether to grant final approval. Objectors are not required to attend the Fairness Hearing, but if you intend to appear you must state your intention to do so in the manner described above. Settlement Class Members who do not comply with these procedures, or who miss the deadline to file an objection, lose the opportunity to have their objection considered by the Court or to appeal from any order or judgment entered by the Court regarding the Settlement.

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17. Where can I get more information?

Answer:

You can click visit the 'Documents' section of this website where you will find the full Settlement Agreement, the Court’s order granting preliminary approval, the Class Notice, and other relevant pleadings and documents. If you cannot find the information you need on this website, you may also contact Class Counsel for more information. Do not contact the Court to get additional information.

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This website is authorized by the Court, supervised by counsel and controlled by Heffler Claims Group, the Settlement Administrator approved by the Court. This is the only authorized website for this case.

For more information please call (844) 528-0184.

Documents

Please read for a full explanation of the settlement and your options and all applicable timelines.

Contact

Contact us with any inquiries, comments, and/or requests.

Important Dates

  • Objection Deadline:

    Wednesday, August 22, 2018 You must mail your comment(s), objection(s) and/or notice of intent to appear at the Final Approval Hearing so that it/they are postmarked no later than Wednesday, August 22, 2018.
  • Final Approval Hearing Date:

    Wednesday, September 12, 2018 The Final Approval Hearing is scheduled for Wednesday, September 12, 2018. Please check this website for updates.

Important Documents

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