One who intends to leave others better off for his having existed.

5/18/15

"Supreme Court Hits Pension Plans Over High-Cost Mutual Funds"

"Employers who offer retirement plans must pay closer attention to the fee structure of investments under a U.S. Supreme Court decision that rejected the idea a six-year statute of limitations dated from when those investments entered the fund.

The unanimous, 8-page decision in Tibble v. Edison supports the arguments of class-action attorneys who increasingly are suing over high mutual fund fees and the choice of investments within so-called defined-contribution funds...

...Plaintiff lawyers sued over mutual funds that were still in the plan even though lower-cost institutional shares of the same funds were available.

In today’s decision, the court said the “breach or violation” ...can occur whenever a trustee violatess his or her fiduciary duty.  That is a “continuing duty,” the court said, “separate and apart from the trustee’s duty to exercise prudence in selecting investments at the outset.”

...The biggest news in the decision, Donvan said, was that the court refrained from telling fiduciaries exactly what their duty to monitor entails.

“The scope of that duty will be determined on a fact-specific case-by-case basis by lower courts, who will be looking at factors such as the frequency of the ongoing review, how rigorous that review is, and what records managers have maintained to document that they have satisfied their duty to monitor,” he said.

In Tibble, the Supreme Court remanded the case for a lower court to decide whether trustees had actually violated their fiduciary duty by failing to remove high-cost mutual funds from the investment menu. That decision fits with the court’s tendency to put faith in the ability of trial courts to sort out basic issues of tort and securities law unless Congress has specifically removed them from the process."

Daniel Fisher
Forbes, May 18, 2015

http://www.forbes.com/sites/danielfisher/2015/05/18/supreme-court-hits-pension-plans-over-high-cost-mutual-funds/

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