No matter how the U.S. Supreme Court rules in Tibble v. Edison International, one thing is clear: employers will need to be more vigilant about the investments they choose for their company-sponsored 401(k) plans in the future to avoid litigation.
The Supreme Court was expected to decide whether Glenn Tibble and the other petitioners in the case waited too long to file a complaint claiming that Edison International breached its fiduciary duty under the Employee Retirement Income Security Act. At issue were higher cost retail-class shares of six mutual funds that were offered to the company’s 401(k) participants when lower-cost institutional shares were available. The district and appeals courts in the case ruled that the plaintiffs could pursue breach of fiduciary duty claims in the case of three of the funds but that they waited too long under ERISA’s six-year statute of limitations to file a claim regarding the other three funds.
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