M.I.T., N.Y.U. and Yale Are Sued Over Retirement Plan Fees
An article, (“M.I.T., N.Y.U. and Yale Are Sued Over Retirement Plan Fees,”) published in the New York Times (August 9, 2016) stated that attorney Jerome J. Schlichter, representing employees of Yale, New York University, and Massachusetts Institute of Technology, has filed a lawsuit against the respective universities.
The complaint alleges that the universities, as Plan Sponsors of the employee’s retirement plans, failed to monitor excessive fees, allowing their employees to be charged unduly high fees on retirement savings and that the universities failed to “replace more expensive, poor-performing investments with cheaper ones.”
According to the article, written by personal finance reporter, Tara Siegel Bernard, “The universities … each have retirement plans holding more than $3 billion in assets.” Although attorney Schlichter is considered to be a pioneer in retirement plan litigation, having filed more than 20 lawsuits on behalf of workers, these actions have primarily been to represent the interest of workers who participate in 401(k) retirement plans.
The retirement plan fees in question here are related to 403(b) plans, which are offered by public schools and other nonprofit institutions. According to the NY Times:
Had the plans eliminated their long lists of investment options and used their bargaining power to cut costs, the complaints argue, participants could have collectively saved tens of millions of dollars.
“It is important for retirees and employees of universities to have the same rights and ability to build their retirement assets as employees of for-profit companies,” said Mr. Schlichter, a founding partner of Schlichter Bogard & Denton in St. Louis. “They shouldn’t be penalized.”
You can read the article in full at: M.I.T., N.Y.U. and Yale Are Sued Over Retirement Plan Fees
For more information about 403(b) plans and related retirement plan fees, contact the executive benefits consultants at Fulcrum Partners LLC at any of the company’s twelve nationwide offices.