In recent months, a spate of class actions have been brought
against more than a dozen major universities that sponsor 403(b)
plans, including Columbia University, Cornell University, Duke
University, Emory University, Johns Hopkins University, M.I.T.,
Northwestern University, N.Y.U., University of Pennsylvania,
University of Southern California, Vanderbilt University and Yale
University. The suits are filed against each university in its
capacity as a fiduciary of a 403(b) retirement plan and allege
fiduciary breaches under the Employee Retirement Income Security
Act of 1974 (ERISA) relating to payments of excessive
administration fees and failure to replace certain investment
funds. These lawsuits signal that the wave of fee litigation cases
that engulfed the 401(k) market will now extend to 403(b) plans
subject to ERISA. These initial cases mark the beginning of a new
generation of fee litigation cases.
