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U.S. Solicitor General supports Schlichter, Bogard & Dentons position that the Supreme Court should overturn aspects of the Court of Appeals decision in Tibble v. Edison Intl., 729 F.3d 1110 (9th Cir. 2013).
St. Louis, MO (PRWEB) August 27, 2014
On August 19, in response to an invitation from the Supreme Court, the Solicitor General filed the governments official position agreeing with the position of Schlichter, Bogard & Denton and recommending that the Court grant certiorari in Tibble v. Edison Intl, No. 13-550, (S.Ct.) stating that the Ninth Circuit erred in finding imprudent investment claims time-barred by the laws six-year limitations period. The Solicitors brief is available here.
The case hinges on whether an employer or other plan fiduciary can avoid liability for imprudent investment options in a 401(k) plan if those options have been in the plan for longer than ERISAs six-year statute of limitations. The Solicitors brief supports the plan participants, current and former employees of Edison International, who argued that Edison and other plan fiduciaries had an ongoing duty to review plan investments and remove imprudent ones, including with respect to funds first included more than six-years prior to their lawsuit. Edison argued that the participants could not bring a case for excessive fees charged by mutual funds that had been in the plan for longer than six-years.
In the words of the Solicitor General, the Circuit Court decision effectively exempts plan fiduciaries from important ongoing fiduciary duties and fails to protect plan participants retirement savings. Tibble v. Edison, Case No. 13-550, Solicitor Generals Brief, (S.Ct.) at 13. The Solicitor General argues that under the Circuit Courts decision fiduciaries would have no incentive to monitor and update plan investments, and they could retain imprudent investment options forever (absent changed circumstances) once the investment options have been available for more than six years. This would mean that [a] participant who invested in the Plan more than six years after the initial investment decision could never sue, even if the investment was an obviously imprudent one. And a person who became a fiduciary within the limitations period would be immunized from liability even if she never reviewed the investments.
The Edison employees and retirees are represented by Schlichter, Bogard & Denton of St. Louis, Missouri. Founding partner Jerome Schlichter stated, We are pleased that the Solicitor General agrees with our position that fiduciaries cannot be immunized from their ongoing duty to monitor fees in 401(k) plans. The impact of this important issue cannot be overstated, given that over $4.2 trillion of retirement assets are invested in employer-sponsored 401(k) plans in the United States. 2014 Investment Company Fact Book, 54th Edition, 2014. Schlichters firm has brought cases involving claims of excessive fees against other companies, including Krueger v. Ameriprise Financial, Case No. 11-cv-2781, (Dist. MN), Kruger v. Novant Health, Case No. 14-208 (M.D.NC), Gordan v. Mass Mutual, Case No. 13-30184 (Dist. Mass.), Abbott v. Lockheed Martin Case No. 06-701 (S.D.Ill.), Grabek v. Northrop Grumman, Case No. 06-cv-6213 (C.D. Cal.),and Spano v. Boeing, Case No. 06-743 (S.D. Ill.).
For the original version on PRWeb visit: http://www.prweb.com/releases/2014/08/prweb12122107.htm
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