Two days after Yale, MIT, and NYU were sued for excessive 403(b) fees in their retirement plans, attorneys have added four more universities to the suit: Duke University, Johns Hopkins University, the University of Pennsylvania, and Vanderbilt University. Each suit alleges breach of fiduciary duties under the Employee Retirement Income Security Act of 1974 for allowing the plan to incur excessive investment, record-keeping and administration fees that cost participants millions of dollars in lost retirement savings.The lawsuits were the first to be filed among university 403(b) plans. The Duke, Johns Hopkins, UPenn and Vanderbilt 403(b) plans each have more than $3 billion in assets and tens of thousands of participants. The suits make very similar allegations. Over the relevant time periods, plaintiffs claim the university plans used multiple record keepers, imprudently used revenue sharing to pay for record-keeping services and harbored too many investment options, many of which were underperforming funds in a retail share class as opposed to a less-expensive institutional share class. These factors led participants to pay excessive fees, constituting a breach by fiduciaries to ensure participants incur reasonable fees, according to the plaintiffs.
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