A recent ruling involving the three-year statute of limitations involving the Employee Retirement Income Security Act (ERISA) could affect your own retirement plan savings. The unanimous 14-page ruling involving Intel Corporation Investment Policy Committee v. Sulyma involves “actual knowledge” of fiduciary breaches. The implications of this ruling still aren’t clear but are similar to the Court’s other linguistic clarifications regarding ERISA.
The decision raises a lot of questions on both sides of the ERISA controversy. While the statute of limitations is out the window allowing retirement plan participants to contest their supposed hypothetical knowledge regarding ERISA plan disclosures, it also may make legal proceedings in such issues murkier.
“Actual knowledge” is the problematic phrase in the ruling. What it infers is that merely providing disclosures to plan participants is not enough. Participants must know that those disclosures exist as well as understand the contents. However, what if ERISA participants claim that they never had disclosure documents or were aware of them?
Employers must now be vigilant in making sure that their retirement plan participants read as well as understand plan disclosures. At the same time, it will also be more difficult for employers to limit their liability over decisions they make for participant 401(k) changes as the six-year ERISA statute of limitations that govern other parts of the law will now apply.
While this ruling solves the statute of limitations problem, it raises many more questions than it answers. ERISA plan participants should proceed carefully if they feel that their employer has changed their retirement plan and has not provided the necessary documents explaining the change. Knowing one’s rights and how these changes can affect long-term financial and disability planning can lead to sound investment decisions.