RiXtrema's Plan Monitor Ensures Compliance With Tibble v. Edison Decision on Continuous Monitoring

Press Release (ePRNews.com) - NEW YORK - Sep 07, 2017 - RiXtrema, the leading provider of risk management tools and analysis to the financial advisory and broker/dealer community to help ensure that investors get the analysis and advice they need, announced the addition of the new Plan Monitor to enhance the 401kFiduciaryOptimizer 2.0. The feature monitors retirement plans every day, and sends the plan advisor a report as soon as potential problems are found, including those relating to availability of better share classes, availability of lower cost identical investments, and performance problems for plan menu funds versus identical lower cost investments.

“Ten years after the initial filing in a Los Angeles federal court, the Supreme Court recently ruled that a fiduciary must monitor ‘at regular intervals’ and make decisions with the same vigor as if it was the decision to first admit a fund into the plan,” explained RiXtrema President Daniel Satchkov. “This further raises the bar in terms of plan fiduciaries’ responsibility to plan participants and our objective with Plan Monitor is to help facilitate advisors’ and their plan sponsor clients’ ability to make timely decisions in accordance with the mandate of the courts.”

Initially ruled on by the Supreme Court in 2015, Tibble v. Edison was sent back to the lower courts for reconsideration with an ongoing monitoring duty, established by the Supreme Court. Finally, after years of litigation, the case is approaching its conclusion. The ruling issued Aug. 16, 2017, by Judge Stephen V. Wilson of the U.S. District Court for the Central District of California exhibits and reaffirms plan-saving practices for 401(k) advisers and plan sponsors.

The key question that advisors and plan sponsors must ask themselves is: ‘How quickly should I fix my plan?’ The answer from Tibble v. Edison is – right now!

Daniel Satchkov, CFA, president, RiXtrema

From the SCOTUS decision:

Under trust law, a trustee has a continuing duty to monitor trust investments and remove imprudent ones. This continuing duty exists separate and apart from the trustee’s duty to exercise prudence in selecting investments at the outset. The trustee must systematically consider all the investments of the trust at regular intervals to ensure that they are appropriate.

The DOL Fiduciary Rule has changed the legal landscape for plan advisors and ERISA litigation is gaining ever more momentum. Virtually anyone accepting compensation for plans for any sort of financial advice is now an ERISA fiduciary. Significant attorney fee awards have increased incentives to litigate. This means that not only large, but also medium, small and even ‘micro’ plans will be the focus of legal action. Recruiting of plaintiffs for ERISA litigation is now done through billboards and TV ads. ERISA courts expect immediate action when the problem is known and fiduciaries are expected to know their plan.

“The key question that advisors and plan sponsors must ask themselves is: ‘How quickly should I fix my plan?’ The answer from Tibble v. Edison is – right now.” said Satchkov. “Defendants in Tibble v. Edison argued that 2-5 months were necessary for them to fix the problem with share classes once identified, which doesn’t seem unreasonable. But Judge Wilson’s opinion actually makes it clear that for most plan menu problems, the fix should be done ‘immediately’. We recognized a need in the industry for a whole new set of tools to ensure that problems could be quickly identified and remedied, that is why we created Plan Monitor which will watch your plans continuously.”

 To learn more about Plan Monitor and the 401kFiduciaryOptimizer, visit https://rixtrema.net/401k/index or contact RiXtrema at (212) 513-7070.


 Founded in 2010, RiXtrema is the first company to make sophisticated quant algorithms work for investment fiduciaries. RiXtrema built a FiduciaryOptimizer suite of products including 401kFiduciaryOptimizer to help plan advisors grow their business, IRAFiduciaryOptimizer for best interest rollover reporting, AnnuityOptimizer for annuity analysis and Target-Date FiduciaryOptimizer scheduled for release in September 2017. The RiXtrema research team received the 2015 Peter L.  Bernstein award, one of the most prestigious awards in finance, for its article Risk Estimation and Hedging: A Reverse Stress Testing Approach, published in The Journal of Derivatives in April 2015. For more information, visit www.rixtrema.com.


Leslie Swid
Impact Communications
(913) 649-5009

Source : RiXtrema Follow on Google News


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