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Supreme Court Clarifies that Fiduciaries Must Monitor All Plan Investment Options

Participants in Northwestern University’s two defined contribution plans sued the university and other plan fiduciaries claiming that the plans’ investment lineups, which together contained over 400 options, were confusing to employee investors. According to plan participants, the fiduciaries breached their duties under ERISA (among other reasons) because the plan investment lineups contained imprudent investment options, including high-fee “retail” share class mutual funds and annuities. The district court dismissed the claims, and the Seventh Circuit upheld the dismissal, reasoning that because the plan contained a broad range of investment options from which participants could select, fiduciaries did not breach any fiduciary duty. In a unanimous decision, the Supreme Court rejected that reasoning as being directly inconsistent with the Court’s prior holding in Tibble v. Edison Int’l, 575 U. S. 523, 530 (2015) in which it held that ERISA imposes on the responsible plan fiduciary a duty to monitor all plan investments and remove… Continue Reading

February 2022
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