Our Position on Smith v. CommonSpirit Health

United States Court of Appeals for the Sixth Circuit

All the comments presented are those of Fiduciary Wise, and anyone reading this should seek legal counsel before acting and not rely solely on our opinion.

What Fiduciary Wise Chooses to do on All Fiduciary Issues?

1. We believe the method we use to evaluate one fund against another is only one way suggested by the Restatement of Trusts (Third) and not the only way (Restatement, Volume 4, Section 100 (b)(1)).

2. The Supreme Court in the Tibble versus Edison International clearly stated the fiduciary foundation of ERISA is the common law of trusts, which is found in both the Restatement of Trusts (Third) and the Prudent Investor Act (PIA).

3. It is not uncommon to find a lower court (federal District Courts or federal Appellate Courts) to rule contrary to the Supreme Courts but where the Supreme Court has already ruled on a matter of law, we side with the Supreme Court.

4. The reasons Fiduciary Wise chooses to compare a particular fund against a suitable passive funds are:

  • This method comes the closest to both the law and the spirit of the law to exclusively protect the plan participant and their beneficiaries ERISA 404(a)(1)(A).
  • This method is the easiest to understand and determine if the existing fund meets the efficiency test under the Restatement and PIA.
  • The best way to meet the DOLs “pecuniary” requirements and the “substantive” requirements suggested by the Office of the Solicitor General in the Hughes versus Northwestern University case.
  • The Fiduciary Wise method of testing a fund for efficiency has shown to be effective in the federal courts.

5. Fiduciary Wise is an independent professional ERISA 402(a) Named Fiduciary, and we believe the safest way to defend the investments in a plan in the event of a challenge by the DOL, IRS, or Participant Claim is by comparing each fund to a passive peer fund to determine cost efficiency.

Fiduciary Wise Opinions Only, as a non-attorney on the Smith versus CommonSpirit Health.

1. We believe the Sixth Circuit rulings in this case will be overturned by the Supreme Court. There is just too much existing and recent case law by the Supreme Court against the Sixth Circuit decisions.

2. Read the summary of this case here, a significant reason for the dismissal of the case as stated by the Sixth Circuit is the way the Plaintiffs pleaded the case.