The lawsuit alleges the university and a university-affiliated health system breached their fiduciary duties by causing participants in their 403(b) plans to pay excessive fees.
Emory University in Atlanta is the latest university to be sued over alleged fiduciary breaches in the management of its defined contribution plans.
The lawsuit, filed Thursday by law firm Schlichter, Bogard & Denton in U.S. District Court in Atlanta, alleges Emory University and Emory Healthcare, a university-affiliated health system, breached their fiduciary duties by causing participants in their 403(b) plans to pay excessive record-keeping, administrative and investment management fees, and by retaining high-cost and poor-performing investment options. Also listed as defendants are Emory Pension Board, Emory Investment Management and Mary. L. Cahill, vice president of investments and chief investment officer at Emory University.
The allegations echo those brought against the 403(b) plans of New York University, Yale University, Duke University, Johns Hopkins University,University of Pennsylvania and Vanderbilt University, and against a 401(k) plan of the Massachusetts Institute of Technology last week. All the lawsuits were filed by Schlichter, Bogard & Denton on behalf of more than 100,000 participants combined.
As of Dec. 31, 2014, the Emory University Retirement Plan and the Emory Healthcare Inc. Retirement Savings and Matching Plan had $2.6 billion and $1.1 billion in assets, respectively.
As of the same date, the plans' lineups contained the same 111 investment options, with TIAA-CREF, Vanguard Group and Fidelity as record keepers. Among other charges, the lawsuit alleges that having multiple record keepers is inefficient and costly, and that many of the investment options were similar and offered at high-cost share classes when lower-cost share classes were available.
" Emory University and Emory Healthcare Inc. value their faculty and staff and provide valuable benefits to them,” said university spokeswoman Elaine Justice in an e-mail. “Through our retirement programs, we offer access to a range of investment options to provide flexibility in meeting individual needs and retirement goals. We are committed to these principles and operate our retirement programs in accord with federal law.”
Meaghan Kilroy is an online reporter at sister publication Pensions & Investments.
