Justices Toss Edison Pension Case Back to 9th

     (CN) – Edison International employees can pursue claims that the utility mismanaged their pensions through investments made 15 years ago, a unanimous U.S. Supreme Court held on Monday.
     Glenn Tibble leads a group of current and former Edison employees claiming that under the Employee Retirement Income Security Act (ERISA), their retirement plans had been recklessly managed through the inclusion of expensive retail-class mutual funds and other risky investment vehicles.
     A federal judge dismissed the bulk of the employees’ claims for being outside the six-year statute of limitations allowed by ERISA. The court did, however, agree that Edison should have investigated wiser, institutional investments before going with the retail-class mutual funds and awarded the employees $370,000.
     A panel for the 9th Circuit upheld the lower court decision, finding that ERISA starts the statute of limitations clock when a company decides to include an investment vehicle in its plan. If the employees know about the inclusion, the clock runs for three years and if – as in this case – they are unaware until later, the six-year limit applies, the appeals court held.
     After agreeing to hear the case this past October, a unanimous U.S. Supreme Court held on Monday that the 9th Circuit should not have laid down a strict deadline for filing claims without considering the nature of Edison’s fiduciary duty to its employees.
     “The 9th Circuit did not recognize that under trust law a fiduciary is required to conduct a regular review of its investment with the nature and timing of the review contingent on the circumstances,” Justice Stephen Breyer wrote for the court.
     “Of course, after the 9th Circuit considers trust-law principles, it is possible that it will conclude that respondents did indeed conduct the sort of review that a prudent fiduciary would have conducted absent a significant change in circumstances,” he continued.
     Without deciding whether or not Edison had breached its fiduciary duty to the employees through the investments in question, the high court noted that trust law requires an ongoing duty to monitor investments and remove imprudent ones.
     “This continuing duty exists separate and apart from the trustee’s duty to exercise prudence in selecting investments at the outset,” Breyer wrote, adding that the employees’ suit remains timely as long as an alleged breach of that duty occurred within six years of filing suit.
     On remand, the 9th Circuit must determine whether such a breach occurred and whether the employees had even raised a claim regarding Edison’s ongoing fiduciary duty, the high court concluded.

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