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Three major U.S. universities facing ERISA lawsuits

Employer-sponsored retirement plans, such as 401(k) plans, are part of the retirement portfolios of many U.S. workers. What happens with such plans can have major impacts on what kind of retirement workers are able to have.

Given this, how employers act when it comes to the different aspects of the sponsored plans they make available to their workers can have major implications. For example, what actions they take regarding the monitoring and negotiating of fee levels for the plans can matter considerably. This is because, over time, what the fee levels are for a given employer-sponsored retirement plan can have big ramifications on how much in the way of retirement savings workers who participate in the plan ultimately end up with.

Employers are subject to various requirements, through the federal Employee Retirement Income Security Act, when it comes to how they act in regards to employer-sponsored retirement plans they offer employees. Among these requirements is a requirement to act in their employees’ best interests when it comes to their managing/administration of the offered plans. This requirement extends to an employer’s actions when it comes to plan fees.

A recent set of lawsuits accuses three major American universities of failing to meet this requirement. Last week, Yale University, New York University and the Massachusetts Institute of Technology each had a separate lawsuit alleging such brought against them by some of their employees. Specifically, the universities are accused of violating their fiduciary duties under ERISA by allowing the fees their employees are being charged on employer-sponsored retirement plans to get too high by failing to properly monitor such fees and by failing to use their bargaining power to properly keep such fees down.

As can be seen from these lawsuits, employees who suspect their employer has failed to take proper measures regarding aspects of employer-sponsored retirement plans, such as fees, may have ERISA-related legal actions they can take. Lawyers experienced in ERISA retirement plan matters can give guidance on ERISA-related legal options to workers here in the Houston area who feel their employer made harmful missteps regarding the administration/management of an employer-sponsored retirement plan they participate in.

Source: Click2Houston, “MIT, NYU, Yale sued over retirement plan fees,” Katie Lobosco, August 10, 2016

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