{"id":253,"date":"2015-08-31T23:23:04","date_gmt":"2015-09-01T06:23:04","guid":{"rendered":"https:\/\/erisa-experts.com\/blog\/?p=253"},"modified":"2016-03-01T13:14:33","modified_gmt":"2016-03-01T21:14:33","slug":"erisas-fiduciary-duty-to-monitor","status":"publish","type":"post","link":"https:\/\/erisa-experts.com\/blog\/2015\/08\/31\/erisas-fiduciary-duty-to-monitor\/","title":{"rendered":"ERISA’s Fiduciary Duty to Monitor"},"content":{"rendered":"

By Joseph A. Garofolo<\/a><\/p>\n

In Tibble v. Edison International<\/em>, 135 S. Ct. 1823 (2015), the Supreme Court clarified the applicability of\u00a0ERISA’s statute of limitations to the fiduciary duty to monitor.\u00a0 The plaintiffs alleged that fiduciaries violated the duty to monitor investments by continuing to offer retail-class mutual funds to 401(k)\u00a0plan participants as opposed to institutional-class funds with lower fees.\u00a0 The Court held “that the duty of prudence involves a continuing duty to monitor investments and remove imprudent ones” and that\u00a0a breach\u00a0of the duty to monitor occurring within ERISA’s statute of limitations was sufficient to hold that plaintiffs’ fiduciary breach claims\u00a0were not time barred.\u00a0 Id.<\/em> at 1829.<\/p>\n

While Tibble<\/em> involved the duty to monitor 401(k) plan investments,\u00a0another important fiduciary duty to monitor\u00a0exists with regard to the appointment of plan fiduciaries and the selection of service providers to plans.\u00a0 The Department of Labor has explained the following:<\/p>\n

At reasonable intervals[,] the performance of trustees and other fiduciaries should be reviewed by the appointing fiduciary in such manner as may be reasonably expected to ensure that their performance has been in compliance with the terms of the plan and statutory standards, and satisfies the needs of the plan.\u00a0 No single\u00a0procedure will be appropriate in all cases; the procedure adopted may vary in accordance with the nature of the plan and other facts and circumstances relevant to the choice of the procedure.<\/p>\n

\u00a029 C.F.R. \u00a7 2509.75-8, FR-17.<\/p>\n

The Department has made it clear that the “reasonable intervals” standard also applies to monitoring plan service providers.\u00a0 See<\/em> http:\/\/www.dol.gov\/ebsa\/publications\/fiduciaryresponsibility.html<\/a>.<\/p>\n

Notably, the duty to monitor is part of a fiduciary’s\u00a0obligations under ERISA \u00a7 404(a)(1).\u00a0 Indeed, consistent with the Supreme Court’s analysis in Tibble<\/em>, some courts have\u00a0held that it is part of the duty of prudence.\u00a0 However,\u00a0the duty to monitor\u00a0should not\u00a0be\u00a0confused with\u00a0co-fiduciary duties under ERISA \u00a7 405(a)\u2014that section requires the elements of one of its subsections (e.g.<\/em>, knowledge of a fiduciary\u00a0breach by another without making reasonable remedial efforts) whereas\u00a0those elements are not required to be satisfied in order for a breach of ERISA \u00a7 404(a)(1) to occur.<\/p>\n

Notwithstanding the difference between the duty to monitor and co-fiduciary duties, it is critical for fiduciaries to\u00a0understand both, as ERISA is not forgiving to fiduciaries who are\u00a0unware of their responsibilities.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By Joseph A. Garofolo In Tibble v. Edison International, 135 S. Ct. 1823 (2015), the Supreme Court clarified the applicability of\u00a0ERISA’s statute of limitations to the fiduciary duty to monitor.\u00a0 The plaintiffs alleged that fiduciaries violated the duty to monitor investments by continuing to offer retail-class mutual funds to 401(k)\u00a0plan participants as opposed to institutional-class … <\/a><\/span><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14,17,11,13,16,9],"tags":[],"class_list":{"0":"entry","1":"post","2":"publish","3":"author-jgarofolo","4":"post-253","6":"format-standard","7":"category-401k-plans","8":"category-disability-plans","9":"category-erisa-regulations","10":"category-fiduciary-duties","11":"category-health-plans","12":"category-supreme-court-decisions"},"_links":{"self":[{"href":"https:\/\/erisa-experts.com\/blog\/wp-json\/wp\/v2\/posts\/253","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/erisa-experts.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/erisa-experts.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/erisa-experts.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/erisa-experts.com\/blog\/wp-json\/wp\/v2\/comments?post=253"}],"version-history":[{"count":10,"href":"https:\/\/erisa-experts.com\/blog\/wp-json\/wp\/v2\/posts\/253\/revisions"}],"predecessor-version":[{"id":263,"href":"https:\/\/erisa-experts.com\/blog\/wp-json\/wp\/v2\/posts\/253\/revisions\/263"}],"wp:attachment":[{"href":"https:\/\/erisa-experts.com\/blog\/wp-json\/wp\/v2\/media?parent=253"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/erisa-experts.com\/blog\/wp-json\/wp\/v2\/categories?post=253"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/erisa-experts.com\/blog\/wp-json\/wp\/v2\/tags?post=253"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}