Last month, the United States Supreme Court ruled unanimously in Tibble v. Edison International that retirement plan fiduciaries have an ongoing duty to monitor plan investments.  The ruling came in a case involving challenges to plan investment decisions made more than six years before suit was filed. The lower courts had ruled some claims were barred by the statute of limitations.

In a 2007 lawsuit, participants in the Edison 401(k) Savings Plan sued various Edison International entities and the plan fiduciaries alleging numerous claims under ERISA.  The claims included that the plan fiduciaries should have offered identical lower-cost institutional shares instead of the more expensive investment options selected in 1999 and 2002.

The Supreme Court reversed the lower courts’ ruling that ERISA’s six-year limitations period barred plaintiff’s claims that the 1999 mutual fund investments were imprudent.  Although the Supreme Court stated that the lower court correctly asked whether the last action which constituted a part of the breach or violation of the duty of prudence occurred within the rele­vant 6-year period, the lower court was incorrect to focus on the act of designating an investment for plan inclusion to start the six ­year period. Instead, the lower courts should have recognized that a fiduciary is required to conduct a regular review of its investments with the nature and timing of the review contingent on the circumstances.  The case highlights the need for retirement plan fiduciaries to monitor plan investments pursuant to written procedures.

A number of federal agencies recently issued guidance in response to the United States Supreme Court’s ruling in Windsor, which held that Section 3 of DOMA is unconstitutional.  On September 18, 2013, the Department of Labor (“DOL”) Employee Benefits Security Administration (“EBSA”) issued Technical Release 2013-04, and adopted the same rule previously outlined in IRS Revenue Ruling 2013-17 (and discussed more fully here) to apply to same-sex marriages for purposes of ERISA.

Same-sex couples will be treated as married for all purposes under ERISA if they were legally married in a state that recognizes same-sex marriage, regardless of where they live now.  The term “marriage” now includes same-sex marriages that are legally recognized as a marriage under the law of any state, territory or possession of the United States or any foreign jurisdiction that has the legal authority to sanction marriages.  This is the case regardless of where the couple resides, even if they reside in a state that does not recognize same-sex marriage.  It is important to be aware, however, that like the IRS position, the EBSA definition of “spouse” and “marriage” do not include individuals (of the same or opposite sex) who are in recognized formal relationships under state law, such as domestic partnerships or civil unions, even if, under state law, those individuals would be afforded the same rights and responsibilities as married persons.

In August 2013, the DOL issued less clear revisions to its definition of “spouse” for purposes of FMLA.  In an internal memorandum, the DOL Secretary instructed agencies within the Department “to look for every opportunity to ensure that we are implementing [the Windsor] decision in a way that provides the maximum level of protection for workers and their families.” Publicly, however, the DOL revised a fact sheet (Fact Sheet #28F: Qualifying Reasons for Leave Under the Family and Medical Leave Act) that redefined the term “spouse” to include some same-sex spouses.  This revision, however, created something of a caveat in the law.  At least for current FMLA purposes, it seems that an employee is only entitled to take FMLA leave to care for a same-sex spouse with a serious health condition if the employee resides in a state that recognizes same-sex marriage.  This leaves open questions of whether FMLA leave is available to care for a same-sex spouse if the employee works in a state that recognizes same-sex marriage, but lives in a state that does not; or if the employer is located in a state that does not recognize same-sex marriages, but has an office in a state that does.  These questions will likely be addressed in later DOL guidance.

For FMLA purposes, employers should be aware that providing leave to an employee who does not reside in a state that recognizes same-sex marriage in order to care for a same-sex spouse may lead to the employee receiving more than 12 weeks of leave.  Leave is only properly designated as FMLA leave if it is taken for a qualifying reasons.  It is unclear under the guidance offered if caring for a same-sex spouse when the employee does not reside in a state recognizing same sex marriage is a “qualifying” purpose.  Therefore, providing leave to an employee who is not a resident of a state that recognizes same-sex marriage to take care of a same-sex spouse technically may not exhaust his or her 12 week FMLA allotment.

In light of these changes, employers should take steps to ensure they are complying with the law and following the guidance offered to date.  This includes informing managers and human resources professionals of the changes in the law, updating relevant policies and documents, and monitoring future guidance on this topic.