Investors Win in Supreme Court 401(k) Decision [View all]
http://blog.aarp.org/2015/05/22/investors-win-in-supreme-court-401k-decision/?sf38331640=1
The U.S. Supreme Court this week sent a strong message to employers offering 401(k)s: You cant just pick investments for the plan and then forget about them.
This unanimous decision is expected to provide greater protection for 401(k) participants who increasingly rely on these plans to fund their retirement. And it may also trigger more lawsuits by workers unhappy with their investment options and the fees charged, legal experts say.
Participants over the long term should benefit from all of this, says Rick Meigs, president of 401khelpcenter.com. It will drive plan sponsors or brokers to try to deliver funds that they can legally defend for being in the plans.
The case, Tibble v. Edison, was originally filed in 2007. Employees of Edison International, a California-based utility, claimed that the company failed in its fiduciary duty to workers when selecting six mutual funds in the 401(k) plan. Funds can have a variety of share classes with different fees. The workers argued Edison breached its duty by choosing more expensive retail-class mutual funds when nearly identical and cheaper institutional-class funds were available.