Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
Latest Breaking News
General Discussion
The DU Lounge
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
Economy
Related: About this forumInvestors Win in Supreme Court 401(k) Decision
http://blog.aarp.org/2015/05/22/investors-win-in-supreme-court-401k-decision/?sf38331640=1The 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.
InfoView thread info, including edit history
TrashPut this thread in your Trash Can (My DU » Trash Can)
BookmarkAdd this thread to your Bookmarks (My DU » Bookmarks)
5 replies, 1216 views
ShareGet links to this post and/or share on social media
AlertAlert this post for a rule violation
PowersThere are no powers you can use on this post
EditCannot edit other people's posts
ReplyReply to this post
EditCannot edit other people's posts
Rec (5)
ReplyReply to this post
5 replies
= new reply since forum marked as read
Highlight:
NoneDon't highlight anything
5 newestHighlight 5 most recent replies
Investors Win in Supreme Court 401(k) Decision (Original Post)
Sherman A1
May 2015
OP
mahatmakanejeeves
(57,600 posts)1. Thanks. I was just about to start a thread on this.
What the Supreme Court 401(k) ruling means for you
By Dean Starkman
@deanstarkman
May 19, 2015, 8:23 AM
The U.S. Supreme Court broadened protections of workers' retirements with an important decision that increased the responsibilities of the overseers of corporate 401(k)s, particularly regarding fees charged by mutual fund companies. The court opened the door for employees to sue plan administrators who place retirement funds in high-fee products when cheaper alternatives are readily available.
The decision in Tibble vs. Edison International comes on the heels of a proposal by the Labor Department that would require investment advisors to put clients' interests first across a broad swath of retirement-related transactions, particularly those involving individual retirement accounts, which differ from 401(k)s in that the personal accounts don't involve employers. IRAs and 401(k)s together make up about half of the nation's retirement assets.
What did the Supreme Court say in its decision?
In a unanimous ruling, the court said company administrators have a continuing duty to monitor investment decisions and improve imprudent ones, even long after the initial investments have been made.
What does the Supreme Court ruling mean to my 401k?
The decision, which specifically dealt with high-fee mutual funds, expands the responsibility of plan administrators to offer competitively priced mutual funds and other financial products to their workers, potentially lowering their costs and increasing the performance of retirement portfolios.
@deanstarkman
May 19, 2015, 8:23 AM
The U.S. Supreme Court broadened protections of workers' retirements with an important decision that increased the responsibilities of the overseers of corporate 401(k)s, particularly regarding fees charged by mutual fund companies. The court opened the door for employees to sue plan administrators who place retirement funds in high-fee products when cheaper alternatives are readily available.
The decision in Tibble vs. Edison International comes on the heels of a proposal by the Labor Department that would require investment advisors to put clients' interests first across a broad swath of retirement-related transactions, particularly those involving individual retirement accounts, which differ from 401(k)s in that the personal accounts don't involve employers. IRAs and 401(k)s together make up about half of the nation's retirement assets.
What did the Supreme Court say in its decision?
In a unanimous ruling, the court said company administrators have a continuing duty to monitor investment decisions and improve imprudent ones, even long after the initial investments have been made.
What does the Supreme Court ruling mean to my 401k?
The decision, which specifically dealt with high-fee mutual funds, expands the responsibility of plan administrators to offer competitively priced mutual funds and other financial products to their workers, potentially lowering their costs and increasing the performance of retirement portfolios.
Sherman A1
(38,958 posts)3. No reason not to cross post it
in other forums.
mahatmakanejeeves
(57,600 posts)5. No need. You got it right the first time.
The Economy Forum is the place for this to be.
I've got a thread about DOL's proposed rule regarding financial advisors, but I couldn't find it earlier this morning. I'll try again.
Three minutes later: I found it:
Obama backs new rules for retirement advice
elleng
(131,107 posts)2. Very good news,
and what we should have expected all along, imo.
Sherman A1
(38,958 posts)4. Precisely
I completely agree.....