Every year, millions of employees entrust their retirement savings to retirement plans protected under federal law. The managers of these plans are fiduciaries, required to act prudently and loyally to safeguard plan participants’ retirement dollars. Failures by fiduciaries have stark financial consequences for the participants. Every excessive fee charged and every dollar lost by virtue of underperforming investment options compounds over time, draining the value of participants’ investments available upon retirement.
The amount may seem small, but the impact of excessive fees or underperforming investments on your account over time is significant. For example, if you make $60,000 per year, excessive fees of just 1% in your retirement plan can cost you $170,000 or more over the course of your career. That can mean your future monthly retirement income will be reduced by up to 9%, the equivalent of one full month of income each year you are retired.
Background on This Class Action
This class action was brought on behalf of participants in the George Washington University Retirement Plan for Faculty and Staff and the George Washington University Supplemental Retirement Plan (“Plan”) against the Plan’s fiduciaries. The complaint alleges the Plan fiduciaries breached their duties to act prudently and to minimize costs on behalf of the Plan and its participants. Specifically, the Plan fiduciaries failed to use the Plan’s enormous bargaining power to negotiate with third party service providers and instead allowed the Plan to pay excessive investment, recordkeeping and administrative fees. Further, the Plan fiduciaries failed to monitor and timely remove underperforming Plan investment options. Finally, the Plan fiduciaries chose higher cost retail share classes for Plan investment options when lower cost investment share classes were available for the same funds.
As a result of Defendants’ fiduciary failures, the Plans’ participants paid higher recordkeeping fees than necessary, paid higher retail investment share class fees, and were burdened by duplicative funds (including poorly performing funds) that resulted in higher fees and lower investment returns.
If you are a participant or beneficiary of the Plans, contact FDAzar here.