University Of Maryland Medical System Corp. 403(b) Retirement Plan Investigation For Current & Former Employees
Edelson Lechtzin LLP is investigating whether current and former employees of the University of Maryland Medical System Corp. have been harmed by mismanagement of the UMMS Voluntary 403(b) Plan. Our preliminary investigation indicates that the UMMS Voluntary 403(b) Plan paid excessive fees to Prudential Retirement for administrative services.
Additionally, it appears that Prudential may have used its GoalMaker advisory service to funnel UMMS Voluntary 403(b) Plan participants’ retirement savings into Prudential’s own overpriced proprietary investment products and into other investments that paid kickbacks to Prudential. Even worse, GoalMaker may have excluded the low-cost index funds in the Plan’s investment menu available from reputable providers that did not pay kickbacks to Prudential. This resulted in the participants paying excessive investment management fees, which over the past six years cost participants millions of dollars in retirement savings. Courts have ruled that such practices violate the Employee Retirement Income Security Act of 1974 (ERISA).
As shown below, even a small fee can have a large impact on your retirement savings.
A study by the Government Accountability Office found that “even a seemingly small fee can have a large negative effect on savings in the long run. As shown [in this chart], an additional 1% annual charge for fees would significantly reduce an account balance at retirement.” Click here to view PDF from the U.S. Government Accountability Office (see page 10).