The U.S. Supreme Court issued a decision Monday that could have far-reaching implications for how long a retirement plan participant has to sue an employer for breach of fiduciary duty in a 401(k) plan. In Tibble v. Edison International, the Court ruled that plan fiduciaries have a continuing duty separate and apart from the duty to exercise prudence in selecting investments at the outset to monitor, and remove imprudent, trust investments.
The lower courts had ruled that Glenn Tibble and the other petitioners in the case waited too long to file a complaint claiming that their employer, 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 companys 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 ERISAs six-year statute of limitations to file a claim regarding the other three funds.
