Employee benefit plan fiduciaries must keep reviewing investments

Q&A with Barbara Klepper

published in The Oklahoman | June 2, 2015

Fiduciaries of employee benefit plans that are subject to the Employee Retirement Income Security Act of 19774 (ERISA) are held to one of the highest legal standards. That standard was recently put to the test before the U.S. Supreme Court in Tibble v. Edison International. In that case, several retirement plan participants argued that the plan’s fiduciaries breached their duties by failing to properly monitor its investments. At issue were investments with high fees.

Employee benefits attorney Barbara Klepper was interviewed about the high court’s decision, which ruled that ERISA fiduciaries have an ongoing duty to monitor investments and remove imprudent ones. She said that duty includes continually monitoring fund performance and plan investment policies and procedures.

“Fiduciaries should frequently, for example, conduct a review of all plan investment options to determine if those options should continue to be offered, consider whether to replace underperforming funds or to change the investment strategy, and properly document the review process and any decisions that were made,” said Klepper.