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Response to Sherman A1 (Original post)

Thu May 28, 2015, 11:05 AM

1. Thanks. I was just about to start a thread on this.

What the Supreme Court 401(k) ruling means for you

By Dean Starkman

May 19, 2015, 8:23 AM

The U.S. Supreme Court broadened protections of workers' retirements with an important decision that increased the responsibilities of the overseers of corporate 401(k)s, particularly regarding fees charged by mutual fund companies. The court opened the door for employees to sue plan administrators who place retirement funds in high-fee products when cheaper alternatives are readily available.

The decision in Tibble vs. Edison International comes on the heels of a proposal by the Labor Department that would require investment advisors to put clients' interests first across a broad swath of retirement-related transactions, particularly those involving individual retirement accounts, which differ from 401(k)s in that the personal accounts don't involve employers. IRAs and 401(k)s together make up about half of the nation's retirement assets.

What did the Supreme Court say in its decision?

In a unanimous ruling, the court said company administrators have a “continuing duty” to monitor investment decisions and improve “imprudent” ones, even long after the initial investments have been made.

What does the Supreme Court ruling mean to my 401k?

The decision, which specifically dealt with high-fee mutual funds, expands the responsibility of plan administrators to offer competitively priced mutual funds and other financial products to their workers, potentially lowering their costs and increasing the performance of retirement portfolios.

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Sherman A1 May 2015 OP
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