via Wall Street Journal
The Massachusetts Institute of Technology, New York University and Yale University were sued Tuesday for allegedly causing participants in their retirement-savings plans to pay excessive fees, making them the latest to be targeted in a wave of similar litigation challenging the use of retail mutual funds in 401(k) and other retirement plans.
As with many of the previous 401(k) fee cases, the new suits allege the plans breached their duties under the Employee Retirement Income Security Act of 1974 by stocking their investment menus with retail mutual funds rather than lower-cost institutional versions of the same investments.
While plaintiffs in other 401(k) fee cases have challenged the use of retail mutual funds, experts say the three new cases are among the first to put the spotlight on 403(b) retirement plans sponsored by many universities. Similar to 401(k)-style plans, 403(b) plans are organized under a different section of the Internal Revenue Code. NYU and Yale offer 403(b) plans, while MIT offers a 401(k) plan.