This week, in Hughes et al. v. Northwestern University et al., the U.S. Supreme Court held that the Employee Retirement Income Security Act (ERISA) imposes a duty of prudence on fiduciaries that includes a continuing duty to monitor investments and remove imprudent investments in a reasonable time. The defined contribution plans at issue each allowed participants to choose their individual investment mix from a menu of options selected by the plan administrators. The Court, nevertheless, found that the diversity of a plan’s investment menu does not excuse imprudent decisions by fiduciaries, even if the menu includes lower cost investments that plan participants sought.

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