A United States District Judge recently ruled that a lawsuit filed against Yale University would be allowed to move forward, the Yale Daily News reported.
The lawsuit, filed by four Yale employees in August 2016, states that the University's retirement plan requires employees to pay administrative fees that are excessive and unfair.
Yale enlists an external group of investment managers to oversee its retirement plans for staff. The lawsuit alleges that the University did not bargain hard enough with this external group for a deal that their employees would be able to afford. The result is that faculty and staff have to pay $200-300 to this external management group for record-keeping — an amount that the plaintiffs believe is unreasonable.
Many of Yale's peer institutions, such as Columbia University, Princeton University, and Penn have also faced cases related to retirement plans.
In 2017, Penn became the first elite college in recent years to “win complete dismissal of a lawsuit challenging the fees and investment options associated with its retirement plan,” Bloomberg News reported.
In the lawsuit waged against Penn, plaintiffs argued that the University was paying more fees than it should be for annuities and mutual funds, thereby failing to uphold its fiduciary duties, the Philadelphia Inquirer reported.
However, a Pennsylvania-based federal judge ultimately disagreed with this argument, deciding in 2017 that Penn has “perfectly reasonable” plans similar to a “bundled cable and internet service," Bloomberg News reported.
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