Several ERISA breach of fiduciary duty class actions involving allegedly excessive retirement plan fees were filed this week against higher education institutions including colleges, universities, and medical schools. The plaintiffs in these cases primarily are current and former participants in section 403(b) retirement plans.

These cases allege that plan fiduciaries made unreasonable and imprudent decisions that negatively affect the value of the plaintiff’s retirement accounts. In particular, the plaintiffs are targeting higher education institutions that use multiple vendor investment platforms in their 403(b) retirement plans, alleging that such arrangements lead to duplicative and excessive fees. “Fiduciaries,” under ERISA, may include boards of trustees, administrative and investment committees, officers, and potentially others in higher education management. Fiduciaries may be personally liable for any losses caused by a breach of fiduciary duties.

The complaints allege that fiduciaries:

• Failed to oversee prudent investment options

• Did not take steps to ensure that fees were reasonable and/or paid excessive expenses

• Failed to negotiate for or present lower cost investment options

• Did not elicit competitive bids from providers

• Failed to remove underperforming investment options

• Hired third parties that did not owe fiduciary duties to administer the plans

So far, the lawsuits have targeted private higher educational institutions which are subject to ERISA, the federal employee benefits law, and its fiduciary requirements. Most public higher education institutions are exempt from the ERISA fiduciary rules, but are still subject to similar state law-based fiduciary requirements.