The unanimous decision handed down by the Supreme Court in Tibble vs. Edison International has made clear plan sponsors have an ongoing fiduciary duty to monitor the investments in 401(k) plans.
Citing the fundamentals of trust law, which the court said ERISA's fiduciary duty is derived from, the decision laid to rest the question of whether or not sponsors are liable for imprudent investments implemented in a plan more than six years before a claim is brought.
"A trustee has 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," wrote Justice Stephen Breyer, who delivered the opinion for the court.
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