Justices make it easier to sue over 401(k) retirement plans

[Omaha Steve]

Source: AP

WASHINGTON (AP) — The Supreme Court has ruled unanimously in favor of participants in employee retirement plans who object to companies' investment decisions that eat into retirement savings.

The justices on Monday revived claims by current and former employees of energy company Edison International. The employees argued that the company chose mutual funds with excessive fees.

Edison offers employees roughly 40 mutual funds to choose from in deciding how to invest. The case involved a few funds in which the company had chosen higher-cost ones open to the general public instead of identical investments with lower costs that are open only to institutional investors. The Edison employees contend that the company did not act in their best interests by choosing the higher-cost funds.

Read more: http://bigstory.ap.org/article/52555712504b4dd59af8d685587934a9/justices-make-it-easier-sue-over-401k-retirement-plans

[still_one]

1. The fees can really eat up growth, some as high as 2%. That is why self-directed 401K are so much

better

[closeupready]

2. Yeah, but wait! How would Masters of the Universe make their money?

If everyone's 401(k) was self-directed? No way. Gotta protect that middleman.

[still_one]

3. What was I thinking?

[yellowcanine]

4. Companies should not be making investment decisions for employees.

Most public agencies and non-profits give employees a choice of companies such as TIAA-CREF, Fidelity, etc. And within those plans the employee can select the fund balance based on various factors such as risk and length of time to retirement.

[Javaman]

5. the place I work for is switching from a 401k to an esop...

race to the bottom.

[TexasBushwhacker]

6. Simple solution

Make the limits you can contribute to tradional IRAs the same as 401Ks. That way, if you don't like the funds offered by your company, you can contribute to your own, self directed IRA. I've never undderstood why the limits are different anyway.