Fiduciaries Held Liable for Selecting Retail Mutual Funds

Congress, the courts, and the Department of Labor continue to address issues of 401(k) plan fees and expenses. The Labor Department's interim final regulation on disclosure of pension plan fees became effective July 16. Legislation on plan fees is still under serious consideration by the House Education and Labor Committee. In addition, mutual fund fee regulations were proposed and released by the Securities and Exchange Commission on July 22.

As earlier WorkCite articles have highlighted, several courts are dealing with class action lawsuits claiming that ERISA fiduciaries breached duties of prudence and loyalty by selecting 401(k) investment options with unreasonably high fees and failing to disclose those fees properly to participants. See "Seventh Circuit Refuses Rehearing on 401(k) Plan Fees Decision" and "Plan Fees: Fiduciaries Must Focus on Float." One of these plan fee cases has now been tried, Tibble, et al., v. Edison Int'l., et al., U.S.D.C (C.D.Ca.) Case