Well, this is awkward. The University of Chicago, home to Nobel laureates, quant fanatics and more investing expertise than one can shake a stick at is getting sued for high retirement plan fees.
Joining Northwestern, its Chicago-based brethren, the venerable university is accused of carrying high fees and offering a poor selection of investment funds in its two retirement plans (Daugherty v. The University of Chicago, N.D. Ill., No. 1:17-cv-03736, complaint filed 5/18/17).
“The lawsuit seeks class treatment for over 36,000 participants in the university’s retirement plans, which hold more than $3 billion in assets combined,” Bloomberg BNA reports. “[It] alleges the university selected and retained investment funds and insurance company annuities that caused the plans to incur far higher administrative fees and expenses relative to the size of the plans, causing participants millions of dollars in economic loss.
“The university selected numerous underperforming investment options when lower-cost alternatives were available,” it added.
Duke University, John Hopkins, The University of Pennsylvania, Vanderbilt, Massachusetts Institute of Technology, New York University, Yale and Columbia are all the subject of similar lawsuits, first filed last August.
The legal action is part of a larger movement towards lower fees industry-wide, attracting the attention of tort lawyers to many private sector retirement plans.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
