Vanderbilt Employees Sue Over Underperforming Retirement Fund

Lawsuits claim university and medical center failed to monitor Vanguard Dividend Growth Fund

Mar. 19, 2026 at 3:12pm

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Vanderbilt University and Vanderbilt University Medical Center have been sued by proposed classes of employees who allege the institutions failed to properly monitor an underperforming Vanguard retirement fund offered to workers. The lawsuits claim the Dividend Growth Fund consistently underperformed its benchmarks and similar investment strategies, and that the universities should have swapped it for a better option.

Why it matters

The lawsuits highlight the fiduciary duty of retirement plan administrators to monitor investment options and make prudent decisions on behalf of plan participants. Underperforming funds can significantly impact employees' long-term retirement savings, making this an important issue for Vanderbilt workers and other university staff with similar retirement plans.

The details

The lawsuits, filed in the U.S. District Court for the Middle District of Tennessee, center on Vanguard's Dividend Growth Fund, which invests primarily in large-cap stocks that pay dividends. The complaints allege this fund consistently underperformed its benchmarks as well as the returns of similar investment strategies, and that a prudent fiduciary would have replaced it with a better-performing option.

  • The lawsuits were filed on March 19, 2026.

The players

Vanderbilt University

A private research university located in Nashville, Tennessee.

Vanderbilt University Medical Center

The academic medical center and research enterprise associated with Vanderbilt University.

Vanguard

A non-party investment management firm that offers the Dividend Growth Fund at the center of the lawsuits.

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What’s next

The lawsuits will proceed through the U.S. District Court for the Middle District of Tennessee.

The takeaway

This case highlights the importance of retirement plan administrators closely monitoring investment options and making prudent decisions to protect the long-term financial interests of plan participants. Underperforming funds can significantly impact employees' retirement savings over time.