There are a number of important lessons for plan sponsors and their advisors in the seminal 9th Circuit Tibble v. Edison decision outlined by the law firm of Trucker Huss.
Most importantly, plans need to investigate whether lower cost share classes are available and, even if the plan does not meet the minimum, should investigate whether they can obtain a waiver. Other lessons include:
• Plans do not need to automatically exclude retail share classes.
• Consultants making investment decisions or giving advice must be monitored.
• All investment decisions should be documented, especially if more expensive share classes are used.
• Revenue sharing needs to be closely monitored by the plan sponsor, especially concerning fees paid directly to the investment consultant.
