lawsuit

Penn joins other schools in class action lawsuit over retirement benefits | Courtesy of American Advisors Group/Creative Commons

This month Penn joined a familiar list of peer universities — including Duke, Harvard and Yale — in a lawsuit over employee retirement plans.

The class action lawsuit claims that University retirement plans have been charging fees that are too high for school employees. All of the schools involved are being accused on the grounds that they all use several providers, as opposed to one, to manage the retirement plans. Having multiple vendors decreases the bargaining power of workers, according to the lawsuit.

Another issue in this case is the amount of investment options available, which are more expensive than others available. For example, Johns Hopkins University employed five “record keepers,” the term used for the providers, which in total had 440 options, according to the complaint. Though Johns Hopkins reduced the number to three in January, the plaintiffs argued that the change was not great enough to remedy the issue and said it only confused the investors.

According to Investment News, Penn spokeswoman Phyllis Holtzman said Penn has used a “rigorous process to review all aspects of the investment options offered to its faculty and staff to ensure they are administered with the highest degree of care and prudence.” She has also stated that the university plans to “defend ourselves vigorously against this litigation,” according to Bloomberg BNA.

By the end of 2014, Penn had $3.8 billion in assets, Vanderbilt had $3.4 billion and Johns Hopkins had $4.3 billion, according to the New York Times.

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