Complaints have been filed by participants in many university 403(b) plans as of late. Complaints have been filed in various federal courts on behalf of employees at MIT, NYU, Yale, Duke, Johns Hopkins, University of Pennsylvania and Vanderbilt, all seeking class action status. All suits claim that by employing more than one recordkeeper, the universities were precluded from any bargaining power to negotiate lower fee arrangements. Thus, the plans overpaid millions of dollars annually. The suits also state that the university sponsored plans offered expensive investments relative to less expensive alternatives, and offered too many funds from which to select, with some plans offering as many as 400 investment options, serving to confuse participants.
www.nytimes.com; August 11, 2016.