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Employers must be vigilant on 401(k) options

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in Compensation and Benefits,Human Resources

A new decision by the U.S. Supreme Court has upped the fiduciary ante for employers that offer defined contribution retirement plans.

THE LAW: The Employee Retire­ment Income Security Act (ERISA) requires employers that offer retirement plans that include investment options to monitor those options with an eye to protecting employee/beneficiary interests. Employers may be liable for damages employees suffer from imprudent investments or investments with excessive fees or costs.

The Uniform Prudent Investor Act requires informing employees if an investment that was previously considered prudent becomes imprudent due to “changed circumstances.”

WHAT’S NEW: The Supreme Court recently issued a unanimous ruling that signals changes in ERISA compliance. The case, Tibble v. Edison International (U.S. Supreme Court, No. 13-550, 2015), involved a holding company for several energy companies. Edison operated 401(k) plans for about 20,...(register to read more)

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