The Massachusetts Institute of Technology, one of the nation’s most prestigious universities, stands accused of hurting workers in the company’s retirement plan by engaging in an improper relationship with the financial firm Fidelity.
A lawsuit headed to trial in September alleges that MIT ignored the advice of its own consultants and allowed Fidelity to pack the university’s retirement plan with high-fee investment funds that ended up costing employees tens of millions of dollars. In return, the lawsuit said, MIT leveraged millions of dollars in donations from Fidelity.
MIT and Fidelity say the allegations have no merit.
The same as any employer that offers workers a retirement plan, MIT is required by law to set up investment options that are in the best interest of its employees and retirees.
“And we contend they egregiously failed to do that,” said Jerry Schlichter, the attorney behind the lawsuit. Schlichter has made a career of targeting big company and university retirement plans, saying in lawsuits that they charge excessive fees and hurt workers. He sues to try to force the companies to offer a better plan. That has earned him the nickname “the 401(k) Lone Ranger.” […]