Universities sued over high TIAA-CREF, Fidelity retirement plan fees

If you are in UO’s ORP and/or the TDI 403(b) retirement plans, do you know how much you are paying your money managers?

As this NYT story notes, it matters:

Even modest reductions in costs can have a significant effect on retirees’ savings. An oft-cited example from the Labor Department: Paying 1 percentage point more in fees over a 35-year career — say 1.5 percent instead of 0.5 percent — can leave that worker with 28 percent less money at retirement. An account with $25,000 — and no further contributions for those 35 years — would rise to only $163,000 instead of $227,000, at an annual rate of 7 percent.

The complaint against N.Y.U. — which involves two 403(b) plans covering faculty, research administration and the medical school — centers largely on costs. The complaint said that participants were offered too many investment choices (there were more than 100 options for faculty), and that many of them were too expensive. The suit, filed in Federal District Court for the Southern District of New York, singles out several investments, including the TIAA Traditional Annuity, which it said has severe restrictions and penalties for withdrawal, as well as variable annuities that have several layers of fees and have historically underperformed.

TIAA said it needed more time to review the lawsuit. …

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