The “Yale Professor” Letters on Fund Expenses

This article was prepared by Fred Reish, Bruce Ashton and Josh Waldbeser.

Letters to 6,000 sponsors of 401(k) plans, sent out by a Yale law school professor several weeks ago, generated considerable comment and controversy.  Some of the letters we reviewed suggested that the recipients were operating a “potentially high-cost plan” and that the fiduciaries may have breached their fiduciaries duties.  We sent an article by email a couple of weeks ago describing these letters and giving you a link to our bulletin on the Drinker Biddle website.  (A copy of that email is at

Since the last email, we have been able to do a more in-depth analysis of the professor’s underlying study and have concluded that it has material limitations.  As a result, it does not provide a valid basis for concluding that fiduciaries have breached their duties.  We have put together an “open letter” to the retirement plan community, together with a memorandum that supports our analysis.

Chief among the deficiencies are the use of stale data, the failure to consider the plan design and services being offered by the plan and, perhaps most important, the failure to take into account revenue sharing used to pay the costs of plan administration and/or to provide a return to the participants.

You can obtain a copy of the letter and memorandum at



The material contained in this communication is informational, general in nature and does not constitute legal advice. The material contained in this communication should not be relied upon or used without consulting a lawyer to consider your specific circumstances. This communication was published on the date specified and may not include any changes in the topics, laws, rules or regulations covered. Receipt of this communication does not establish an attorney-client relationship. In some jurisdictions, this communication may be considered attorney advertising.

The views expressed in this article are the views of Fred Reish, and do not necessarily reflect the views of Faegre Drinker.