The March 9 editorial, “Wasting 401(k) plan assets,” contains a number of inaccuracies and misrepresentations of the employer community's position on Tibble vs. Edison, the pending U.S. Supreme Court case involving 401(k) plan fees. The undersigned organizations filed an amicus brief on Jan. 23 in defense of the plan sponsor.
Our brief did not, as the editorial suggests, argue against a duty by fiduciaries to periodically monitor funds in a plan. To the contrary, we agreed that this is a duty of all prudent plan fiduciaries. The only disagreement lies with the petitioners' argument that there is a duty to remove an investment option when nothing has changed about the investment itself or the total lineup of options, and participants have chosen to invest in the option with full and accurate disclosure of its fees and other characteristics.
The editorial completely missed the point of our brief, which was that the statute of repose, sometimes called the statute of limitations, limits the time period in which lawsuits can be brought challenging the prudent selection of the investment options. Congress created a six-year liability period in part to reduce the volume of litigation faced by plan sponsors. The plan sponsor community urges the court to protect the integrity of the statute of limitations by affirming the judgment of the court of appeals. Plaintiffs were trying to sidestep the time limit to file a claim by disguising a challenge on the original selection of a fund as a failure to periodically monitor the plan's lineup.
THE NATIONAL ASSOCIATION OF MANUFACTURERS
THE CHAMBER OF COMMERCE OF THE UNITED STATES OF AMERICA
THE ERISA INDUSTRY COMMITTEE
THE AMERICAN BENEFITS COUNCIL
THE BUSINESS ROUNDTABLE