A longtime employee of Southwest Research Institute claims the San Antonio-based nonprofit mismanaged its employee retirement plan.
The nonprofit faces a potential class action lawsuit for allegedly violating the Employee Retirement Income Security Act (ERISA) by failing to administer the defined contribution plan "in the best interests of participants," which allegedly led to them losing millions of dollars.
The Teachers Insurance and Annuity Association of America (TIAA), or its affiliate, manages all of the investments in the plan. It is the only plan among more than 9,000 plans with at least $250 million in assets covered by ERISA that only offers TIAA-managed investments.
The plaintiff alleges the nonprofit failed to manage TIAA and its investments, many of which have underperformed for decades by as much as two percent per year. In addition, many of TIAA's index funds are more expensive than similar funds from competitors.
The former employee is seeking a declaration that the nonprofit and twenty other defendants breached their fiduciary duties, as well as an order compelling the defendants to "personally make good" all losses incurred by the plan as a result of this breach.
The exact amount the plaintiff hopes to recover was not specified.
According to a 2021 report, Southwest Research Institute's retirement plan had more than 5,800 participants, with 2,825 active members and nearly $1,5700,000,000 in assets, making it one of the 900 largest plans in the U.S. Patrick Danner "Southwest Research Institute employee sues, alleging retirement plan mismanagement, millions in losses" www.expressnews.com (Jun. 29, 2023).