Retirement plan investment fees
Tibble v. International
In brief
Plan fiduciaries must keep monitoring investments after choosing them, but the Supreme Court did not decide whether Edison breached that duty; it wiped out the Ninth Circuit’s ruling and sent the case back.
- Where it stands
- Decided
Decided 9-0 · May 18, 2015 · Opinion by Justice Breyer
- What it’s about
- Tibble challenged Edison International’s use of higher-fee funds despite identical lower-fee options.
- Who it affects
- Tibble’s claim must be reconsidered with the ongoing monitoring duty in view; the Court did not decide whether Edison breached that duty.
Summary: written with AI from the case record.
What it's about
The Court wiped out the Ninth Circuit’s ruling and sent the case back (vacated and remanded), explaining that fiduciaries must keep monitoring investments and remove imprudent ones after choosing them; it did not decide whether Edison breached that duty.
The dispute centered on whether investment choices should be judged only when made or also while a retirement plan continues to hold them.
Question presented
Does ERISA's six-year statute of repose bar a claim that plan fiduciaries breached their duty of prudence by offering higher-cost mutual funds to plan participants, even though identical lower-cost mutual funds were available, when fiduciaries initially chose the higher-cost mutual funds more than six years before the claim was filed?
What the Court decided
Holding
The Ninth Circuit erred by applying §1113’s statutory bar to a breach of fiduciary duty claim based on the initial selection of the investments without considering the contours of the alleged breach of fiduciary duty. ERISA’s fiduciary duty is “derived from the common law of trusts,” Central States, Southeast & Southwest Areas Pension Fund v. Central Transport, Inc., 472 U. S. 559, 570, which provides that a trustee has a continuing duty—separate and apart from the duty to exercise prudence in selecting investments at the outset—to monitor, and remove imprudent, trust investments. 729 F. 3d 1110, vacated and remanded.
- Result
- Vacated
The Court's reasoning
The Court said ERISA, the federal retirement-benefits law, draws on trust law. Under that law, plan fiduciaries (people responsible for managing plan assets) have a continuing duty, separate from their initial investment choices, to monitor investments and remove ones that are not prudent.
The vote
What's next
The Ninth Circuit will reconsider the claim in light of the continuing duty to monitor investments. Whether Edison breached that duty remains undecided.
Documents
Opinions
Docket activity
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AI analysis generated: Case Briefing
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AI analysis generated: Impact Analysis
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AI analysis generated: Decision Record
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Opinion added: Tibble
Sources
Primary materials plus reporting. Best-effort analysis: this explainer relies on a mix of primary materials and trusted secondary sources. Official filings and opinions remain authoritative.