Participants in two Georgetown University defined contribution plans sued the university, alleging that its management of the plans violated its fiduciary duties under the Employee Retirement Income Security Act.
The participants, who are seeking class-action status, complained that the two 403(b) plans should have reduced the number of record keepers to one from three, "failed adequately to evaluate and monitor expenses," and paid "unreasonable and excessive fees" for investments and plan administration, according to the lawsuit.
The university's plans offer too many investment choices and offer options that "historically and consistently underperformed their benchmarks," said the complaint in Wilcox et al. vs. Georgetown University et al. that was filed Feb. 23 in the U.S. District Court for the District of Columbia.
The plans has aggregate assets of $2 billion as of Dec. 31, 2016, according to the most recent Form 5500s.
"We are currently reviewing the complaint," Rachel Pugh, a spokeswoman for Georgetown University, Washington, wrote in an email Wednesday. "The university continually monitors its retirement plans' investment offerings and service providers, and regularly makes changes that it believes are in the best interest of plan participants."
The complaint contains many of the allegations that have characterized a series of ERISA lawsuits against large private universities that have been filed since 2016, most notably having more than one record keeper and offering many investment choices, some of which plaintiffs' attorneys claim are redundant and/or poor-performing.
The Georgetown plans have three record keepers — TIAA-CREF, Vanguard Group and Fidelity Investments — and the plaintiffs argued that this system is "inefficient and costly," causing participants to pay "duplicative, excessive and unreasonable fees" for record-keeping and administrative services.
Last week, a U.S. District Court judge in New York rejected a request for summary judgment by New York University, thus allowing an ERISA-fee case against two NYU 403(b) plan to proceed to trial.