In our previous blog posts, we highlighted the recent lawsuits against the employee retirement plans at top national universities: MIT, NYU, and Yale. It seems that the law-firm is going to extend that trend and keep up the attack. The latest class action lawsuit paperwork is now being filed against four more nationally known schools: Duke, Johns Hopkins, University of Pennsylvania, and Vanderbilt.
We have no specific insight into the case. We don’t know if the insufficient standards for cost-monitoring which are endemic to non-profit institutions (a problem we have already highlighted in "Sorting Out Legacy Retirement Plans") are applicable to the nine universities under scrutiny today. Conversely, we have no idea if these lawsuits are simply opportunistic witch-hunts with plaintiffs looking to extract lucrative concessions from financially advantaged schools. We have no idea, but we’ll be following the cases intently.
What we do know is that the legal actions of the past few weeks should have investment and plan committees double-checking their processes right now. Moreover, if these lawsuits bear fruit for the plaintiffs, it could spur a wave of legal action. Get your processes resolved and documented to protect yourself because it doesn’t look like these sorts of cases are simply going to stop.