Case Study: Here is How a Prudent Process Approach Prevails

The Ask: How can I monitor my plan lineup to ensure that the funds selected are the best share classes?

Litigation against plan sponsors is nothing new. But in the aftermath of the financial crisis of 2007-2008, the number of excessive fee lawsuits that were brought by participants in 401(k) has increased. Tibble vs. Edison, decided in 2017,  was one of the most famous cases in which the plaintiffs claimed that executives of the Edison International Inc. 401(k) Plan breached their fiduciary duties by selecting more-expensive retail-priced share classes versus institutionally priced shares for identical investment options. Despite potential legal consequences, there are plans which have not done anything to remedy the situation.

The Problem: Fund companies change their lineup all the time.




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