The law firm of Schlichter, Bogard & Denton has now turned its attention to the education sector, filing separate class action lawsuits against three universities on behalf of over 60,000 employees in their defined contribution retirement plans, both 401(k) and 403(b).
According to a press release, the complaints, David B. Tracey, et al., v. Massachusetts Institute of Technology, et al.; Dr. Alan Sacerdote, et al., v. New York University, et al.; and Joseph Vellali, et al., v. Yale University, et. al., were filed in the U.S. District Courts of Massachusetts, the Southern District of New York, and the District of Connecticut, respectively.
“We contend that these universities, as fiduciaries, have breached their duties under the law to protect the retirement assets of their employees and retirees,” said plaintiffs’ attorney Jerry Schlichter of Schlichter, Bogard & Denton, who added, “These university employees deserve the same right to build meaningful retirement assets as employees of for-profit companies.”
The press release claims that the three complaints share a similar thread — all are allegations that these universities, as employee retirement plan sponsors, breached their duties of loyalty and prudence under ERISA by “… causing plan participants to pay millions of dollars in unreasonable and excessive fees for recordkeeping, administrative, and investment services of the plans.”
The complaints further allege breaches of fiduciary duty by the universities due to their having chosen and retained numerous high-cost and poor-performing investment options compared to available alternatives. Plaintiffs argue that this “substantially reduced the retirement assets of the employees and retirees.”
Regarding New York University and Yale University, both of which have 403(b)-type plans, the plaintiffs allege employees paid excessive recordkeeping fees in addition to selecting and imprudently retaining funds which they say have underperformed for years. Moreover, the complaints challenge the use of multiple recordkeepers, rather than a single recordkeeper — a practice that they claim “… caused plan participants to pay duplicative, excessive, and unreasonable fees for plan recordkeeping services.”
As for Massachusetts Institute of Technology’s 401(k) plan, the complaint alleges that the close relationship between MIT and with Fidelity Investments resulted in MIT choosing the latter as plan recordkeeper — and that there was no competitive bidding process, which violated MIT’s duty to act in the exclusive interest of its employees and retirees. The complaint also takes issue with Fidelity CEO Abigail Johnson’s long-running position on the MIT Board of Trustees, and the inclusion of more than 150 Fidelity funds on the $3.5 billion plan menu — funds that the complaint describe as “high priced retail funds,” while charging that plan was large enough to command lower-priced funds.
Since 2006, the law firm of Schlichter, Bogard & Denton, based in St. Louis, Missouri, has filed 20 such complaints and secured nine settlements.
According to a press release, the complaints, David B. Tracey, et al., v. Massachusetts Institute of Technology, et al.; Dr. Alan Sacerdote, et al., v. New York University, et al.; and Joseph Vellali, et al., v. Yale University, et. al., were filed in the U.S. District Courts of Massachusetts, the Southern District of New York, and the District of Connecticut, respectively.
“We contend that these universities, as fiduciaries, have breached their duties under the law to protect the retirement assets of their employees and retirees,” said plaintiffs’ attorney Jerry Schlichter of Schlichter, Bogard & Denton, who added, “These university employees deserve the same right to build meaningful retirement assets as employees of for-profit companies.”
The press release claims that the three complaints share a similar thread — all are allegations that these universities, as employee retirement plan sponsors, breached their duties of loyalty and prudence under ERISA by “… causing plan participants to pay millions of dollars in unreasonable and excessive fees for recordkeeping, administrative, and investment services of the plans.”
The complaints further allege breaches of fiduciary duty by the universities due to their having chosen and retained numerous high-cost and poor-performing investment options compared to available alternatives. Plaintiffs argue that this “substantially reduced the retirement assets of the employees and retirees.”
Regarding New York University and Yale University, both of which have 403(b)-type plans, the plaintiffs allege employees paid excessive recordkeeping fees in addition to selecting and imprudently retaining funds which they say have underperformed for years. Moreover, the complaints challenge the use of multiple recordkeepers, rather than a single recordkeeper — a practice that they claim “… caused plan participants to pay duplicative, excessive, and unreasonable fees for plan recordkeeping services.”
As for Massachusetts Institute of Technology’s 401(k) plan, the complaint alleges that the close relationship between MIT and with Fidelity Investments resulted in MIT choosing the latter as plan recordkeeper — and that there was no competitive bidding process, which violated MIT’s duty to act in the exclusive interest of its employees and retirees. The complaint also takes issue with Fidelity CEO Abigail Johnson’s long-running position on the MIT Board of Trustees, and the inclusion of more than 150 Fidelity funds on the $3.5 billion plan menu — funds that the complaint describe as “high priced retail funds,” while charging that plan was large enough to command lower-priced funds.
Since 2006, the law firm of Schlichter, Bogard & Denton, based in St. Louis, Missouri, has filed 20 such complaints and secured nine settlements.
- Log in to post comments