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University of Chicago Lawsuit

This lawsuit alleges that the University of Chicago breached its fiduciary duties under ERISA, failing to negotiate “separate, reasonable and fixed” fees for recordkeeping, thus, allowing plan participants to pay excessive asset-based fees for administration that increased with the value of participant accounts, despite no increase in services. The lawsuit also contends that university fiduciaries failed to monitor plan investments and retained underperforming, excessively expensive investments for the plans. In particular, the complaint mentions the plans’ principal capital preservation fund, the TIAA Traditional Annuity, an insurance company fixed income account that prohibited participants from transferring their TIAA Traditional Annuity account balance during employment except in 10 annual installments. Participants were also unable to take a lump sum distribution from the option without incurring a 2.5% surrender charge. Additionally, the university is also alleged to have violated DOL rules for participant loan programs, approving a loan program that required excessive collateral as security for repayment and charging excessive fees for loan administration.

www.planadviser.com; May 24, 2017.