Participants in a 403(b) plan administered by Washington University in St. Louis sued the school alleging plan managers violated their ERISA duties by, among other things, paying excessive fees for investment and management services and choosing poorly performing investment options.
The university decision-making process “was either flawed or badly executed,” said the complaint filed June 8 in a U.S. District Court in St. Louis. One example of the alleged decision-making process was the inclusion of a “dizzying array” of investment options — 26 from TIAA-CREF and 83 from Vanguard Group, according to the complaint.
Both investment management firms are record keepers for the $3.8 billion Washington University Retirement Savings Plan, according to the complaint, Davis et al. vs. Washington University in St. Louis, which seeks class-action status.
Participants argued that the two-record-keeper arrangement is unnecessarily expensive. “The inefficient and costly structure … has caused plan participants to pay and continue to pay duplicative, excessive and unreasonable fees for plan record keeping and administrative service,” the complaint said.
The suit was filed by Edgar Law Firm; Schneider Wallace Cottrell Konecky Wotkyns; and Berger & Montague.
Susan McGinn, a university spokeswoman, did not comment by press time.