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Washington University in St. Louis is the latest college to face a proposed class action over the fees and investment options in its retirement plan ( Davis v. Wash. Univ. in St. Louis , E.D. Mo., No. 4:17-cv-01641, complaint filed 6/8/17 ).
The lawsuit, filed June 8 in the U.S. District Court for the Eastern District of Missouri, says the university’s retirement plan overpaid for administrative and record-keeping services and offered “historically underperforming” investment options. The lawsuit takes particular aim at the plan’s reliance on two companies—TIAA and Vanguard—for record-keeping services. The use of multiple record keepers confuses investors and leads to higher fees, the lawsuit claims.
With this lawsuit, Washington University joins the company of 14 other prominent colleges facing class actions over their retirement plans, including Yale, NYU, Vanderbilt, and Cornell. Two lawsuits have seen early success, with judges refusing to dismiss many of the claims against Emory University and Duke. Since those rulings against Emory and Duke in May, three new schools have been targeted: the University of Chicago, Princeton, and now Washington University.
The litigation onslaught against university retirement plans began in August 2016, when St. Louis-based Schlichter Bogard & Denton LLP filed proposed class actions against 12 schools in a two-week blitz. The three recent lawsuits were filed by Schneider Wallace Cottrell Konecky Wotkyns LLP and Berger & Montague PC, a legal team that is currently litigating Employee Retirement Income Security Act lawsuits against TIAA, Aon Hewitt Financial Advisors LLC, and Charles Schwab Corp.
Like many other lawsuits, the case against Washington University challenges the school’s decision to offer the CREF Stock Account and the TIAA Real Estate Account. These investment options consistently underperformed lower-cost alternatives, the lawsuit claims.
Washington University’s retirement plan has more than $3.8 billion in assets and covers more than 24,000 people, according to the complaint.
When reached for comment by Bloomberg BNA, a representative for Washington University declined to provide an immediate response.
The Washington University employees are also represented by Edgar Law Firm LLC.
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