(Reuters) - Columbia University was accused on Tuesday of mismanaging its retirement plan in a federal civil lawsuit that alleges $100 million in damages.
The suit is the latest to target a major university’s retirement plan management and to bring under scrutiny fees charged by financial service providers.
The complaint says the Ivy League university, based in New York, retained expensive and poor-performing investment options that consistently underperformed their benchmarks.
“This caused its (retirement) plans and their participants to suffer hundreds of millions of dollars in losses of retirement savings,” said law firm Sanford Heisler LLP, which filed the complaint in U.S. District Court in Manhattan. “As a result, the University’s 401(k) plan included $4.6 billion of investment options that were primarily poor to mediocre performers.”
A university spokeswoman did not immediately comment.
The plaintiff in the case is an unidentified faculty member at Columbia who is suing on behalf of herself and 27,000 current and former Columbia employees and is seeking class action status for the case.
Other well-known universities have also recently been sued over the management of their retirement plans, including the Massachusetts Institute of Technology, Yale University and New York University.
The suits were filed by St. Louis attorney Jerome Schlichter last week, and his firm has since sued other schools on similar grounds, including Emory University, Duke University, Johns Hopkins University and Vanderbilt University.
Schlichter, in an e-mail, declined to discuss whether he plans other litigation.
Reporting by Tim McLaughlin and Ross Kerber in Boston; editing by Jonathan Oatis and Dan Grebler