WU faced with two lawsuits over its 403(b) retirement plan

| Senior News Editor

Two lawsuits were filed alleging a breach of fiduciary law, causing excessive fees and millions of dollars of loss for its retirement plan participants, in June.

Washington University is accused of multiple violations of the Employment Retirement Income Security Act (ERISA) over the selection and monitoring of its 403(b) plan investments, selection and monitoring of plan recordkeepers and the plan’s loan program.The 403(b) plan is worth $3.8 billion and serves over 24,000 individuals.

The first lawsuit, filed on June 8, alleged that Washington University’s 403(b) retirement plan contains multiple violations of ERISA. The University allegedly selected historically underperforming investment options and retained those that charged higher fees, despite lower-cost share classes that were available for the same fund.

A second lawsuit—filed by a former employee of the University on June 23—accused Washington University of allowing Teachers Insurance and Annuity Association of America and Vanguard, a financial services company and investment company, respectively, to place their high-cost proprietary investments in the retirement plan, resulting in millions of dollars in losses for over 24,000 plan participants.

Washington University is the latest of several universities, including Yale University, New York University and Vanderbilt University, to be faced with class action lawsuits regarding retirement plans.

Vice Chancellor for Public Affairs Jill Friedman did not respond to request for comment.