US Supreme Court to review ERISA case

The United State Supreme Court has accepted review of a new ERISA case involving the statute of limitations in retirement fund cases. (Tibble v. Edison Int'l, U.S., No. 13-550, cert. granted 10/2/14)

"The case presents the question: whether participants in retirement plans can hold plan fiduciaries liable for including higher-cost investment funds in the plan when those funds were initially chosen more than six years before the lawsuit, or whether these types of claims are barred by the six-year statute of limitations found in the Employee Retirement Income Security Act."

Check out the full article here.

Word to the Wise : When is investment advice subject to a fiduciary standard?

An interesting article here:

http://www.foxbusiness.com/personal-finance/2014/01/07/problem-with-investment-advice/


The article discusses how ERISA holds that people advising employees/retirees on investment accounts are held to a fiduciary standard - meaning they have to put the interests of the client first before their own. However, when is advice really investment advice, and when is it not? Since this is narrowly defined in ERISA, often advice does not meet the criteria of "investment advice", and therefore the advisor is not held to the standard of a fiduciary.

Moral of the story: be careful and do your own research when someone from your financial institution gives you advice or information. It may not always be what is in your own personal best interest - and the advisor does not always need to tell you the motivation behind their advice.

Be wary, investors!

Pension Plans and ERISA

ERISA is the federal law that spells out the rules regarding pension plans available to employees through their workplace. While ERISA does not generally regulate the content of plans, it does provide minimum standards for certain aspects of the plan such as how employees are informed about the pension plans, how plans should be funded, and how an employee's pension rights can become vested and therefore cannot be forfeited. ERISA also gives employees the right to sue the plan fiduciaries if they have wrongfully been denied benefits or if the plan fiduciaries have breached their fiduciary duty to plan participants.

Some common issues that employees encounter are miscalculation of benefits due to them under a pension plan or wrongful denial of benefits to which an employee is entitled. If you have been wrongfully denied benefits due to you because the plan has incorrectly determined you are not entitled to benefits, or has miscalculated the amount you are entitled to, you should speak to an attorney who specializes in ERISA who can guide you through what remedies may be available.

The Department of Labor has a wonderful resource for frequently asked questions at http://www.dol.gov/ebsa/faqs/faq_compliance_pension.html.