The unanimous decision handed down by the Supreme Court in Tibble vs. Edison International has made clear plan sponsors have an ongoing fiduciary duty to monitor the investments in 401(k) plans.
Citing the fundamentals of trust law, which the court said ERISA's fiduciary duty is derived from, the decision laid to rest the question of whether or not sponsors are liable for imprudent investments implemented in a plan more than six years before a claim is brought.
"A trustee has a continuing duty—separate and apart from the duty to exercise prudence in selecting investments at the outset—to monitor, and remove imprudent trust investments," wrote Justice Stephen Breyer, who delivered the opinion for the court.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
