Yale, M.I.T. & NYU Retirement Funds Gouge Employees, Say Plaintiffs

A plaintiff lawyer who has successfully targeted corporations for failing to properly administer employee retirement plans is now going after three major universities: Yale, Massachusetts Institute of Technology and New York University. Allegations are similar, but under scrutiny are 403(b) plans, the non-profit and public school version of 401 (k)s. The lawyer, Jerome J. Schlichter, is described by the New York Times as “a pioneer in retirement plan litigation” who has been “widely credited with lowering plan fees across corporate America.” Allegations are that the institutions have failed to exert proper oversight over the funds, allowing them to offer employees a blizzard of investment choices, many of them with high management fees that over a period of years can cost a participant tens of thousands of dollars. In the case of M.I.T. the lawsuit alleges the poor oversight is in part related to the institution’s cozy relationship with Fidelity funds, said to be a significant M.I.T. benefactor whose chief executive is on the board of trustees. Among the companies that have agreed to multimillion dollar settlements in employee retirement cases brought by Schlichter are Lockheed Martin, Boeing, Ameriprise, Cigna, International Paper, Caterpillar, General Dynamics, Bechtel and Kraft.