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June 8, 2015

Fiduciaries Be Diligent, Says Supreme Court (article)

Fiduciaries Be Diligent, Says Supreme Court

In a recent Supreme Court case (Tibble v. Edison International, 2015 WL 2340845 (U.S. 2015)), several important issues are at stake.  Of particular note, the Supreme Court underscores, without further defining, the on-going duty of a qualified plan fiduciary to monitor plan investments.  Specifically, a qualified plan must be administered prudently and for the exclusive benefit of plan participants.  There is a duty to select investments prudently, and according to the Supreme Court, there is an additional and distinct duty to monitor those investments.  The Supreme Court is returning the case to the Ninth Circuit Court to discern whether, in fact, this duty was accomplished. 

 

This opinion, affirming on-going fiduciary duties, effectively extends ERISA’s six-year statute of limitations, applicable to claims of a breach of fiduciary duty.  Thus, the statute of limitation continues as long as the challenged behavior continues.

The information contained in this article is provided as general guidance and may be affected by changes in law or regulation. This article is not intended to replace or substitute for accounting or other professional advice. Please consult a CBIZ professional. This information is provided as-is with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.

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