Leading Universities Sued Over Charging High Retirement Benefits Fee
It’s becoming a kind of trend to sue the reputed universities in the U.S. Four more universities are being sued this time and the allegation is that these universities charged an excessive retirement benefits fee from its employees. The universities are defending themselves by claiming that they decided the best option for the employees after conducting reviews regarding the matter.
Which Universities are Sued for Charging High Retirement Benefits Fee?
A few days back, the New York University, Yale University and Massachusetts Institute of Technology were sued. This time universities like Johns Hopkins, Duke, University of Pennsylvania as well as the Vanderbilt are being sued. The lawsuits are filed in different courts on behalf of the employees and the complaints are seeking class-action status. The plaintiffs are represented by Jerome J. Schlichter who is renowned for his revolutionary litigation in the world of 401(k) retirement plans.
The Theme
The theme of all the lawsuits is almost identical. It is alleged that the universities used more than one record keeper to do tasks like operate the plans as well as perform various administrative services to keep the plans running. It is a general opinion that if the universities have opted for one record keeper, they would have had the opportunity to use some bargaining power to negotiate the fees and bring it down. As the universities did not take this step, the employees ended up paying more than what the plans were worth.
The complaints filed against the universities also state that all the plans that were sponsored by the aforementioned universities were too expensive even despite the fact that there were many cheap alternatives easily available. It was also mentioned that the long list of the investment options confused the employees. For example, Duke University had about 4.7 billion in assets that were held by around 38, 000 participants around the end of 2014 used the services of 4 providers who offered 400 investment options.
The Defense
The representative of the Duke University recently stated that they offered more investment options regarding the retirement benefits so that the employees can have more flexibility. He also added that these investments were reviewed continually and managed as per the federal law to offer good outcomes at low costs. A spokeswoman representing the University of Pennsylvania has stated that they adopted a rigorous process the review all the investment options and the university is planning to defend itself vigorously.
