(Bloomberg) -- U.S. Supreme Court justices suggested they willrequire 401(k) plans to periodically monitor the investment optionsthey offer, in a case that may give investors more power to sue over excessivefees.

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Hearing arguments Tuesday in Washington, the justices indicatedthey will revive claims that Edison International’s 401(k) planshould have shifted investors from the retail class shares of threefunds into identical institutional class shares that carried lowerfees.

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Also read: Flood of 401(k) suits expected if Tibbleprevails

Several justices scoffed when Edison’s lawyer argued that a switchof investments might have confused the workers who participate inthe plan.

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“How was there investor confusion?” Chief Justice John Robertsasked. “It seems to me one sentence saying, ‘Well, we have beenpaying 0.3 percent, this is 0.2 percent, that’s why we’re changing’-- they’re not going to, you know, running out in the hallsscreaming that there’s confusion about that.”

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The case is at the Supreme Court amid intensified scrutiny offees in retirement accounts, now the primary savings vehicle forold age. More than a dozen companies, including Lockheed MartinCorp. and ABB Ltd., have been sued since 2006. Lockheed last weeksettled its case for $62 million. Americans held $6.6 trillion in401(k)-type plans as of Sept. 30, according to the InvestmentCompany Institute.

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A federal appeals court said the Edison workers could sue onlyover three funds that were added to the plan within the six-yeartime limit to file a lawsuit. The workers won $371,000 on thosefunds and say they are entitled to additional damages on fundsadded earlier.

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Little Support

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The appeals court’s reasoning drew little support in thehour-long hearing. The justices instead focused on what standardsshould apply when plans continue to hold old investments.

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Edison’s lawyer, Jonathan Hacker, said he agreed with theworkers that funds must periodically monitor investments, eventhose added more than six years earlier. Hacker instead argued thatthe Edison workers had failed to show that the company’s monitoringwas inadequate.

Also read: Supreme Court could redefine ERISA

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Justice Anthony Kennedy balked when Hacker argued that plantrustees don’t have a legal duty to be on constant lookout forcheaper investments.

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“You certainly do if that’s what a prudent trustee would do,”Kennedy said.

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Performance, Expenses

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The workers’ lawyer, David Frederick, said plans have a duty toperiodically look at the performance, expenses and management ofthe funds offered to investors. The Obama administration is backingthe workers.

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The Edison workers say that some of the fees on the retailshares were returned to Edison’s service provider, ultimatelyreducing the company’s administrative costs by $8 million.

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Justices Sonia Sotomayor and Stephen Breyer signaled they wouldprefer to return the case to a lower court to decide how rigorous aplan’s monitoring must be.

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“I, for one, am not ready to do that because I’m not a trier offact for what a reasonable investor would do,” Sotomayor said.

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The justices will rule by the end of their nine-month term inlate June.

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The case is Tibble v. Edison International, 13-550.

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--With assistance from Margaret Collins in New York.

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