Tibble v. Edison – The Gift That Keeps On Giving

Tibble v. Edison – The Gift That Keeps On Giving

By: David I Gensler, MSPA, MAAA, EA

A lawsuit that began in 2011 is finally approaching its conclusion. The plaintiffs claimed that the 17 investment options selected by the plan back in March of 1999 were retail funds instead of lower cost institutional shares. The funds remained in the plan beyond August 16, 2001. That date is particularly relevant since that is as far back as the statute of limitations could go.

The case went all the way to the Supreme Court. While the Supreme Court found neither for the plaintiff nor for the defendant, Read More

Tibble vs. Edison Round II: A Game Changer Ends Not With A Bang But With A Whimper

By: David I Gensler, MSPA, MAAA, EA

No one would argue that when the Supreme Court ruled in Tibble v Edison that plan fiduciaries had “an ongoing duty to monitor plan investments” it was a game changer. Now, for the first time, there was direction (from the highest Court in the land) that a “set it and forget it” mentality when it came to a 401(k) plan’s fund lineup was not sufficient.

But, many of you will recall, that was not the end of the story. After making its ground breaking ruling the Supreme Court remanded the case back to the 9th Circuit.  The 9th Circuit had previously ruled that mutual funds added to Edison’s lineup back in 1999, were beyond the reach of the 6-year statute of limitations. This is the ruling that caused the plaintiffs to take this to the Supreme Court in the first place. So now, in light of the Supreme Court’s ruling, did the 9th Circuit see the case differently?  Spoiler alert – they did not!

Read More

Six Questions Plan Sponsors Should Ask Following the Supreme Court’s 401(k) Ruling

By David Gensler, President

A few weeks ago, I commented in my last blog on the recent U.S. Supreme Court case, Tibble vs. Edison. In that ruling, the Court clarified that retirement plan sponsors have a fiduciary duty “to continuously monitor” the investments in their company’s 401(k) plans. The Court’s ruling also spelled out the responsibilities of plan stewards, directing them to not only monitor trust investments but also “remove imprudent ones.”

While this certainly was not news to the professionals in the retirement plan field, it may come as a surprise to the business owners that sponsor 401(k) plans.

If you are in this latter category, you may be getting an inkling that your practices as a plan sponsor should change. And you would be on the money. Yet the Court’s ruling did not provide any practical guidance as to what this “duty” actually means. Nevertheless, without committing a lot of time and effort to updating your process, you and your management team can create procedures that will lead to what most observers would view as a robust fiduciary governance program.

Read More