401(k) Fee Litigation To Increase Following Tibble Decision

As a result of the U.S. Supreme Court's decision in Tibble v. Edison Int'l, it will now be easier for participants in 401(k) and other participant-directed plans to bring lawsuits challenging investment options added to the plan more than six years before a lawsuit was filed. In a unanimous decision, the Supreme Court rejected the view recently adopted by three federal appellate courts, which had held lawsuits challenging plan fees to be untimely under the six-year statute of limitations under the Employee Retirement Income Security Act (ERISA). Based on the decision, several action steps are recommended at the end of this article.

Factual Background

In 2007, participants in the Edison 401(k) Savings Plan (Plan) sued Plan fiduciaries and others to recover damages for alleged losses suffered by alleged breaches of fiduciary duties. The participants argued that the fiduciaries violated their duties with respect to three mutual funds added to the Plan in 1999 and