There has been much media coverage of the recent class action lawsuits filed against some of the most prestigious universities in the United States by university employees. These class action lawsuits allege that the universities breached their fiduciary obligations in running their defined contribution 403(b) retirement plans by allowing the plans to pay excessive investment, record-keeping and administrative fees, thereby resulting in reduced retirement savings for their employees. The roster of current defendants includes Yale, MIT, Vanderbilt, Duke, Cornell, Johns Hopkins, and the University of Pennsylvania, among others, and more class actions of this type against other universities are expected.  These suits are similar to the fiduciary-duty breach hidden fee litigation that has bedeviled corporate 401(k) plan sponsors for years.  The suits also claim that some university retirement plans offer too many investment options (Duke University allegedly offered more than 400; John Hopkins, 440; and Vanderbilt, 340), have multiple recordkeepers (John Hopkins allegedly has five recordkeepers; Duke and Vanderbilt, four) and the universities failed to put record-keeping and other services for their retirement plans out for competitive bidding on a periodic basis.

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