Kim Jones discussed the U.S. Supreme Court's decision on class actions for 401(k) fiduciary claims in Intel Corporation Investment Policy Committee v. Sulyma.
The court's unanimous opinion resolved a circuit split on what triggers a three-year statute of limitations for ERISA fiduciary-breach class actions. In its findings, the Court ruled that three-year filing claim limits did not apply simply because participants were provided the ability see whether or not their assets were being mismanaged.
In most claims, a six-year statute of limitations applies. But a judge can invoke a three-year statute if limitations if the worker was proven to have "actual knowledge" of the breach.
Jones discussed the ruling with Investment News, explaining that the decision will change how plaintiff firms vet lead plaintiffs.
Benefits Pro noted Jones' surprise by the decision. “The court looked at what ‘actual knowledge’ is," she said. "Intel was arguing that constructive knowledge—that a reasonable person should know what was in the plan documents—was enough. But they couldn’t get around the fact that ‘actual knowledge’ is language in ERISA."
Additionally, Jones' comments to the Society for Human Resource Management expressed that the ruling will make it more difficult for plan fiduciaries to invoke three-year limitations for breaches of fiduciary duty.
"The Supreme Court was bound by the plain meaning of the language. Congress would have to alter the statutory language for the standard to change."Kim Jones, SHRM