403(b) plans are under attack!
Over the last few weeks a rash of class action lawsuits have hit higher education. The lawsuits have been filed by Schlichter Bogard & Denton on behalf of current and former participants. Accusations cover a wide array of improprieties focused around fiduciaries’ failure to adhere to ERISA’s duties of loyalty and prudence.
403(b) plans, typically offered by schools or non-profits, haven’t been the source of much scrutiny or litigation–until now. In the suits, Schlicter follows his typical modus operandi; accusing plan sponsors of paying excessive fees and holding under-performing investment options. Interestingly, Schlicter adds a number of new accusations to the mix including;
- Excessive fees for using multiple record-keepers instead of aggregating assets with one provider to achieve economies of scale.
- Duplication of funds within asset classes.
- Offering too many investment options leading participants to investor paralysis.
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