Boston College recently settled an ERISA suit, bringing to a close a two-year legal challenge over the management of its retirement plan. In 2022, two former employees alleged that the plan failed to meet fiduciary expectations, citing high fees and questionable investment options. Although the school denies any wrongdoing, the allegations highlight the increasing pressure on institutions to keep their retirement plans cost-effective and prudently managed.
Plaintiffs Claim Plan Didn’t Make the Grade
The class action suit alleged that the trustees of Boston College, as well as the investment committee and 10 other unnamed individuals, had failed to meet required fiduciary standards. Since 2019, the plaintiffs alleged, the college’s 401(k) plan burdened participants with steep recordkeeping and investment fees and offered imprudent fund choices. Furthermore, the plaintiffs argued that the trustees neglected to properly monitor the actions of the investment committee and other fiduciaries, allowing the alleged ERISA violations to persist unchecked.
Class Dismissed
Following a two-year delay, Judge William G. Young dismissed a motion for summary judgment and ruled that the suit could continue to trial. Faced with the prospect of an extensive legal battle, Boston College opted to settle and agreed to pay $330,000, with one-third allocated for attorney fees and the remainder to be distributed among the retirement accounts of eligible employees. Additionally, the college committed to enhance its fiduciary practices by engaging a consultant to advise and assist the investment committee for the next five years. Although Boston College maintains that it “regularly negotiated lower fees and monitored investment options,” it agreed to this oversight as part of the settlement terms.
Passing the Fiduciary Test
Boston College’s experience underscores the increasing need for diligent fiduciary oversight and regular benchmarking for retirement plans — and how, win or lose, the expenses that can result from navigating complex ERISA disputes can be costly for plan sponsors. PlanFees provides a comprehensive suite of tools that can help advisors meet client expectations by evaluating plan fees and demonstrating their commitment to keeping fees reasonable. With Prism Total Fees Benchmarking, you can assess whether a plan’s fees are low, average or high compared to similar plans. For a deeper dive into advisory fees, Prism365 analyzes fee ranges for 15 advisory services across five key performance areas. And with RFP Express, you can get up-to-date fee data as well as actual quotes from top providers in 24 hours or less.
By benchmarking fees regularly, advisors can stay proactive by helping ensure their clients’ retirement plans remain competitive and cost-effective. Moreover, this consistent oversight helps build trust and demonstrates a commitment to the highest fiduciary standards.
Don’t wait until exam day to study — brush up on your clients’ plans with PlanFees today.
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