Ivy League colleges face class action lawsuit over retirement funds
- MIT, New York University and Yale University are being sued by employees for allegedly overcharging fees and maintaining expensive investments which yielded low returns over years.
- The suit alleges administrators did not seek the cheapest options for plan administration or oversight, which added rising costs and fewer returns for pension funding.
- Potential conflicts of interest between the MIT board of trustees and the school's financial record-keeping firm are also in question.
While elite colleges and universities may have sizable endowments, pension funds are not in the same state of health, which can lead to difficult positions for institutional spending and personnel management decisions. The University of the Cumberlands is a prime example of financial promises made to a former president to reward years of good service, only to rescind in part thanks to a struggling economy.
Inconsistent or unmonitored policies and procedures can lead to negative outcomes for administrators, even when economic downturn is a legitimate and predictable factor. Faculty can publicly censure administration, or file lawsuits to recoup financial damages. The remedy is full transparency and responsiveness to faculty and staff feedback, clarity on how and why certain administrative decisions are made, and explanation of how decisions align with a mission to take care of these groups: the University of the District of Columbia is an ideal example of this kind of engagement, on the subject of raises for non-union staff.
- New York Times M.I.T., N.Y.U. and Yale are sued over retirement plan fees