Why the Results of Tibble V Edison Should Not Concern the “Well-Educated Plan Fiduciary”
Last Updated: April 28, 2015
- The plaintiff’s claim that Edison, the plan sponsor, provided plan participants a menu of forty investment funds to choose from.
- Of those funds offered, six funds were retail share classes, despite there being an institutional share class available with lower investment expenses.
- The US District Court for the Central District of California granted a judgment of $370,732 in damages for the excessive fees related to three of the six funds.
- The litigation over the remaining three funds moved to the 9thS. Circuit Court of Appeals and then the United States Supreme Court. The Defendants are claiming that the six-year statute of limitations has expired because the funds were added to the plan more than six years ago. Therefore, there is not a continual fiduciary duty to monitor the investments.
- Plaintiffs are claiming there is an ongoing duty to monitor the plan’s investments and the statute of limitations does not apply.
- It would now be clear that plan fiduciaries have an ongoing duty monitor the plan investments and the 6-year statute of limitations doesn’t apply.
- Plan fiduciaries would now have a responsibility to monitor the investment share classes that are in the plan. And they will need to understand the revenue sharing related to the particular share class to ensure that plan participants are not paying excessive fees.