Vanderbilt sued over retirement plan fees, management
A national law firm on Wednesday filed a class-action lawsuit against Vanderbilt University, saying the university mismanaged employee retirement plans and allowed plan managers to charge exorbitant fees.
The suit, Loren L. Cassell et al. v. Vanderbilt University et al., was filed in the U.S. District Court for the Middle District of Tennessee by the St. Louis-based firm Schlichter, Bogard & Denton. The same firm filed similar lawsuits on behalf of employees this week against Massachusetts Institute of Technology, New York University, Yale University, Duke University and the University of Pennsylvania.
“We allege that Vanderbilt University has breached its fiduciary duties under the law," Jerry Schlichter, the attorney for the plaintiffs, said in a statement. “Employees and retirees at universities are entitled to protection from unreasonably high fees and unsuitable retirement plan offerings."
A spokeswoman for Vanderbilt said the university's attorneys had not received the filing by Wednesday afternoon and declined to comment.
The 89-page complaint alleges that employees participating in Vanderbilt's 403(b) plan — which is similar to a 401(k) — paid millions of dollars for administrative and investment services, in part because it worked with multiple firms to provide administrative services for the retirement plan prior to April 2015. Vanderbilt transitioned to a single firm, Fidelity Investments, in April 2015 after an internal review by a retirement plan oversight committee.
The complaint also alleges that Vanderbilt selected costly, low-performing investment options and failed to review them before 2015. University literature touting the 2015 transition to a "streamlined" plan said monitoring fund performance was a "top priority" that the oversight committee would take on.
The suit asks for Vanderbilt to restore money employees lost due to "excessive" fees and retirement plan mismanagement.
The law firm handling the suit has become a dominant voice in the debate over fees for retirement plans.
Schlichter, Bogard & Denton has filed more than 20 similar complaints and gotten nine settlements for employees, according to a statement. In 2015, the Supreme Court ruled on the firm's Tibble v. Edison case, saying in a unanimous decision that workers could sue when their retirement plans offered investments with excessive fees or when employers failed to adequately monitor investment fund performance.
Court makes it easier to sue over 401(k) retirement plans
Reach Adam Tamburin at 615-726-5986 and on Twitter @tamburintweets.