On May 18, 2015, a unanimous U.S. Supreme Court held in Tibble v. Edison International that fiduciaries who select investment options for 401(k) plans have a continuing duty under the Employee Retirement Income Security Act of 1974 to monitor their selections and remove imprudent investment options.
The Court vacated a ruling by the U.S. Court of Appeals for the 9th Circuit that dismissed certain claims brought against fiduciaries of the Edison 401(k) Savings Plan as untimely because they related to investment options that were selected for the plan more than six years before the complaint was filed. Although the Supreme Court declined to define the precise contours of the duty to monitor, the ruling opens the door to claims challenging the prudence of plan fiduciaries retention of investment options within 401(k) plans, including options that were selected outside the limitations period established under ERISA.
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