Employees at three US universities launch legal action over millions of dollars in "excessive" fees for retirement plans.
Employees of leading US colleges Massachusetts Institute of Technology, New York University and Yale University have launched legal action against the institutions over retirement plans which they say caused them to pay “too-high fees”.
Three lawsuits, one against each college, were lodged on Tuesday, alleging that the schools' actions as retirement plan sponsors caused workers to pay millions of dollars in "unreasonable and excessive fees", Associated Press reports.
The suits claim that the schools did not live up to their obligations under the Employee Retirement Income Security Act in US law, which requires employers to act in the best interest of participants and plan beneficiaries, according to reports.
The colleges failed to pick the best-performing or least-expensive investment options and employees had less in retirement savings as a result, the suits allege.
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The papers, filed in U.S. district courts of Massachusetts, the Southern District of New York and the District of Connecticut respectively, are the latest in a series of legal actions relating to the use of retail mutual funds in 401(k) and other retirement plans in the US.
Karen Peart, a spokesperson for Yale, said that the university has not “officially been served with a complaint,” adding that they would be “cautious and careful in administering our plans and will defend ourselves vigorously,” The Wall Street Journal reports.
John Bekman, a spokesman for NYU, said: “NYU takes seriously the welfare of our faculty and employees—including a dignified retirement—and the retirement plans offered to them are chosen and administered carefully and prudently. We will litigate this case vigorously and expect to prevail,” according to the same WSJ report, which stated that MIT declined to comment.
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