A federal class action lawsuit has been filed on behalf of thousands of employees at the University of Rochester that the university has not been aggressive enough in trying to make sure that the workers aren’t charged excessive fees for their retirement plan.
The suit was filed by a Pittsburgh-based law firm, Carlson Lynch Sweet Kipela & Carpenter, specifically for Christopher D’Amore, who worked in UR’s IT department for nearly 21 years.
The suit states that he has been paying more than $500 per year to TIAA in service fees when a reasonable fee for administrative services is no more than $50 per year.
The lawsuit claims that the fees for the retirement plan are close to ten times what they should be, and it says that it appears TIAA is willing to reduce its fees if universities will just make the request.
The suit says that the UR retirement plan has over $4.2 billion in assets and that the university failed to leverage its “tremendous bargaining power” to help those participating in the retirement plan.
Among other things, the lawsuit seeks to find UR liable to make good to the benefit plan all of the losses that is says resulted from a “breach of fiduciary duty.”
The University of Rochester responded with this statement:
"The plaintiffs’ lawyers in this case have unfortunately gotten many of the facts wrong. In fact, the fee paid to TIAA for its record-keeping and administrative services by the University’s retirement plan is actually below the $50 per-participant fee that the complaint alleges is reasonable. Similarly, the allegations reporting the total amount paid to TIAA and the amount paid by Mr. D’Amore for these services are wrong. The University has been a leader in its work to ensure that its retirement plan assets are prudently managed and the fees charged are competitive and reasonable. "
TIAA gave WXXI News this statement:
“TIAA is proud to have served the University of Rochester and its employees for nearly 100 years with one goal in mind - to provide their employees access to high-quality, low-cost retirement investment options to help ensure their financial security.
We believe the allegations in this suit reflect a fundamental lack of understanding of how TIAA serves participants.”