Ninth Circuit Joins Circuit Splits in ERISA Section 404(c) Opinion and Defers to DOL Interpretation of Safe Harbor | Practical Law
In Tibble v. Edison Int'l, the US Court of Appeals for the Ninth Circuit held that a company's 401(k) plan fiduciaries did not violate their duty of prudence under ERISA by including certain investments in the plan, but acted imprudently in including retail-class shares of some mutual funds because they failed to investigate the possibility of institutional-share class alternatives. The Ninth Circuit joined one circuit split by deferring to the DOL's interpretation that the safe harbor from fiduciary liability in Section 404(c) of the Employee Retirement Income Security Act of 1974 (ERISA) does not apply to a fiduciary's selection of investment funds and joined a separate circuit split by applying Firestone deference to breach of fiduciary duty claims (and not just benefit claims).