NYSUT Beats 403(b) Rap
New York State United Teachers and other teachers’ unions dodged a bullet when a federal district court judge ruled that 403(b) plans are not subject to the Employee Retirement Income Security Act (ERISA). Judge Naomi Reice Buchwald dismissed a lawsuit against NYSUT filed by teachers seeking redress because their 403(b) plans – the public sector equivalent to 401(k)s – had high fees and poor returns while the union was receiving payments from ING to promote the plan to members.
Judge Buchwald ruled 403(b)s are “governmental plans” and are exempt from ERISA regulations and sanctions. She then dismissed the suit as it did not fall under federal jurisdiction.
This is good news for teachers’ unions because Keller Rohrback, LLP, attorneys for the plaintiffs, seemed to have targeted NEA for similar legal actions.
