Supreme Court Finds 401(k) Administrators Have Ongoing Duty To Monitor Older Investments

    Contributors to a 401(k) plan provided by Edison International to its employees brought the company to court claiming that the plan manager had an ongoing duty to monitor older investments in the portfolio. The United States Supreme Court recently heard oral arguments to uphold or strike down the 9th Circuit Cort of Appeals’ ruling that the suit was barred by statute of limitations.

    In Tibble v. Edison International, the United States Supreme Court overturned the 9th Circuit ruling that the limitations period does not start to run the day the investment was made and that plan administrators have an ongoing duty to keep investments up to date based on market conditions. Essentially, this new ruling imposes the trust based prudent investor rule on 401(k) management and has the chance to drastically change plan management going forward according to some financial experts.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this case to my attention.