U.S Supreme Court Ruling Says Employers Must Monitor Fees for 401(k) Accounts

U.S Supreme Court Ruling Says Employers Must Monitor Fees for 401(k) Accounts

On Monday, the U.S. Supreme Court gave out a ruling which says that it is the duty of the employers to monitor 401(k) plans in order to guard against high management fees which can drain out retirement savings. The move can bring great benefits to millions of retiring Americans.

The unanimous high court in its ruling said that the employers can even be sued, in case they were unsuccessful in their "continuing duty to monitor" mutual funds in 401(k) accounts for pointlessly high fees, which is likely to shake up the $5.8-trillion market for managing the plans.

In most retirement documents high management fees are usually involved and go overlooked by most of the workers. Although they are not very big and is just one or two percent of the total assets, but in the long term they can cause severe damage to any folder of investment.

The ruling which involved Edison International, the energy giant based in Rosemead came as a surprise to the analysts. It in actual fact transfers the burden of disputes of keeping a watch over the retirement plans from the shoulder of the workers straight to the employers who administer them.

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