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Retirement Planning > Retirement Investing

RiXtrema Launches New Fiduciary Compliance Tool

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RiXtrema announced on Thursday that it has updated its 401kFiduciaryOptimizer 2.0 tool with a plan monitor function to help advisors and broker-dealers monitor retirement plans for compliance with the Supreme Court’s Tibble v. Edison decision.

In 2015, the Supreme Court ruled in Tibble v. Edison that retirement plan sponsors had an ongoing duty to monitor investments in 401(k) plans. The case was initially filed in 2007 when plan beneficiaries sued Edison International for breaching its fiduciary responsibility.

(Related: 3 Common RMD Errors Advisors Must Avoid)

On Aug. 16, Judge Stephen Wilson of the U.S. District Court for the Central District of California reaffirmed the Supreme Court’s decision.

“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,” RiXtrema President Daniel Satchkov said in a statement. “This further raises the bar in terms of plan fiduciaries’ responsibility to plan participants.”

Plan Monitor will analyze retirement plans daily and provide plan advisors with a report of potential problems that need to be addressed.

Satchkov said RiXtrema’s objective with the new tool is to “help facilitate advisors’ and their plan sponsor clients’ ability to make timely decisions in accordance with the mandate of the courts.” 

“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!” Satchkov said. “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.’”

Satchkov said of the decision to launch Plan Monitor, “We recognized a need in the industry for a whole new set of tools to ensure that problems could be quickly identified and remedied.”

— Read Plante Moran Adopts RiXtrema Fiduciary Tool: Tech Roundup on ThinkAdvisor. 


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