U.S. Supreme Court ERISA Plan Rulings Favor Retirement Investment

From: American Retiree (www.AmericanRetiree.com)
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U.S. Supreme Court ERISA Plan Rulings Favor Retirement Investment

The U.S. Supreme Court ERISA plan rulings on Tibble vs. Edison International in May 2015 and Fifth Third Bancorp vs. Dudenhoeffer in June 2014 clarify fiduciary duties and standards, mandating that companies act in the best interest of employees.

In Tibble vs. Edison International, the Supreme Court unanimously ruled that it is insufficient for employers to simply set up a 401(k) retirement plans with investment options without continuing to monitor those investments for any changes.

“ERISA’s fiduciary duty is derived from the common law of trusts, which provides that 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.

In Fifth Third Bancorp vs. Dudenhoeffer, the Supreme Court unanimously decided that Employee Stock Ownership Plans (ESOPs) are subject to the ERISA fiduciary standard, requiring that employers only offer stock in the plan that is a good investment for employees.

Separate from those decisions, the U.S. Department of Labor recently proposed a rule to protect 401(k) and IRA investors to prevent conflicts of interest in retirement investment, which results in annual losses of about $17 billion per year for investors, according to a White House Council of Economic Advisers analysis.

Read more about how these U.S. Supreme Court rulings may improve retirement investment options: http://www.americanretiree.com/u-s-supreme-court-erisa-plan-rulings-favor-retirement-investment

AmericanRetiree.com chronicles today’s active retiree lifestyle and provides retirees with the essential resources and information needed during the Golden Years. Learn more at www.AmericanRetiree.com.


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