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1 1 (August 19, 2021)

handle is hein.crs/goveejz0001 and id is 1 raw text is: Congressional ______ * Research Service a Supreme Court to Weigh in on Retirement Plan Fiduciary Duty to Manage Plan Fees August 19, 2021 Among Congress's key policy priorities is safeguarding retirement income security for working Americans, retirees, and their families. With respect to oversight of 401(k) and similar employment-based retirement plans, a primary consideration is the fees charged to plan participants, as fees can have a substantial effect on a participant's retirement savings amount. In July 2021, the Supreme Court agreed to hear Hughes v. Northwestern University, a case concerning the scope of a plan fiduciary's duty to control retirement plan fees under the Employee Retirement Income Security Act (ERISA), and the circumstances under which participants and others can sue plan fiduciaries for a breach of this duty. This Legal Sidebar provides background on ERISA's requirements for retirement plans and plan fiduciaries, discusses the issues before the Court in Hughes, and concludes with select legal considerations for Congress. Background ERISA provides a comprehensive federal scheme for regulating private-sector employee benefit plans. The Act governs approximately 722,000 retirement plans that contain more than $9 trillion in plan assets. ERISA does not require employers to offer retirement benefits, but those that do must comply with the Act's requirements. The Hughes case involves a so-called 403(b) plan, a 401(k)-like defined contribution plan used by certain educational institutions and tax-exempt organizations. As part of this retirement plan type, each participant has an individual account containing an amount based on employer and employee contributions and investment gains or losses to the account, minus fees or other plan expenses. Defined contribution plans do not provide a guaranteed benefit amount, and participants' account balances generally fluctuate over time. Plan fiduciaries typically compile a menu of investment options, and plan participants may choose investments from this menu. One of ERISA's central goals is to protect . .. the interests of participants and . .. beneficiaries of employee benefit plans. To this end, ERISA imposes certain obligations on plan fiduciaries-persons who generally have discretionary authority or control over the management and operation of employee benefit plans. Among these obligations, ERISA requires fiduciaries to act with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man . .. would use in the conduct of an enterprise of a like character and with like aims. The Supreme Court has recognized that in making Congressional Research Service https://crsreports. congress.gov LSB10636 CRS Legal Sidebar Prepared for Members and Committees of Congress

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