The tally of universities getting hit by lawsuits over 403(b) fees and their fiduciary duty continues to go up.
On Tuesday, Sanford Heisler LLP filed a class complaint in the U.S. District Court for the Southern District of New York, claiming Columbia University breached its obligation under the Employee Retirement Income Security Act to prudently invest its employees’ retirement savings. Similar complaints have been brought against the 403(b) plans at New York University, Yale University, Duke, Johns Hopkins, the University of Pennsylvania and Vanderbilt, as well as a slightly different complaint against Massachusetts Institute of Technology’s 401(k) plan.
“Until employers recognize their duties and fulfill their duties, these cases will keep coming,” Charles Field, a partner of Sanford Heisler and co-lead counsel for the plaintiff, told ThinkAdvisor.
In a class complaint seeking $100 million in damages, Plaintiff Jane Doe, a faculty member at Columbia University and a participant of the university’s retirement plans, sued on behalf of herself and a class of 27,000 current and former Columbia University employees who participated in the plans. The complaint alleges that the university breached its fiduciary duties under ERISA.
“In these types of plans that are established under ERISA they owe a duty to their employees to not only construct an efficient plan that is cost-efficient but they also have to monitor the portfolio and dispose of any investments that are bad,” Field told ThinkAdvisor. “And we’ve looked at [Columbia] and we felt that they failed in that duty and that these people should be able to get the money back, their retirement savings that were lost to this failure to abide by ERISA.”
Columbia University, as well as University Vice President of Human Resources Dianne Kenney, who administers the plans, are named as defendants.
In a statement, Columbia University said: “Columbia is proud of the retirement benefits offered to its faculty and staff and takes its responsibility as a fiduciary seriously. Columbia does not comment on pending litigation.”