The U.S. Solicitor General and the Pension Rights Center have filed briefs with the Supreme Court for a fiduciary breach case the U.S. 8th Circuit Court of Appeals dismissed based on the fact that a DB plan had enough money left over to keep paying benefits.
The U.S. Solicitor General and the Pension Rights Center have filed briefs of Amicus Curiae with the Supreme Court in Thole v. U.S. Bank, a pension-focused case arising under the Employee Retirement Income Security Act (ERISA).
Specifically, the Supreme Court will weigh the following questions: Whether defined benefit (DB) plan participants and beneficiaries may seek relief under 29 U.S.C. 1132(a)(3) when the plan is overfunded; whether defined benefit plan participants and beneficiaries may seek relief under 29 U.S.C. 1132(a)(2) when the plan is overfunded; and whether petitioners have demonstrated Article III standing.
Participants in the U.S. Bancorp Pension Plan filed the lawsuit in 2013. In October 2017, the U.S. 8th Circuit Court of Appeals upheld a lower court’s dismissal of the case based on the fact that, despite some significant investment losses suffered by the plan after investments in affiliated investment funds, the court believed the plan had enough money left over to keep paying benefits. Thus the participants could not prove, in the court’s eyes, that they had the sufficient standing to move ahead on fiduciary breach claims.
Both the U.S. Solicitor and the Pension Rights Center argue that current funded status of a defined benefit (DB) plan is not a proper measure for whether the participants have a right to sue for breaches of fiduciary duties and prohibited transactions under ERISA.
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Michelle Yau, with Cohen Milstein Sellers & Toll, who is one of the leading attorneys representing the plaintiffs, said, “We are very pleased with the amicus briefs supporting our position. The Solicitor General’s brief explains that ERISA participants’ ability to sue for fiduciary breach is rooted firmly in the common law of trusts, endorsed by Congress, and consistent with Supreme Court precedent. And the brief filed by the Pension Rights Center makes clear why a plan’s funded status ‘is not a sensible measure of injury in fact.’”
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