The Supreme Court accepted an ERISA case Friday that will determine whether pension plan participants can sue plan fiduciaries for mismanagement if they have not experienced financial harm.
Some participants in the U.S. Bancorp Pension Plan filed suit in 2013 claiming that plan fiduciaries engaged in misconduct, including failing to diversify investments, that caused $750 million in losses.
When the participants questioned the investments involved, U.S. Bank replaced those amounts, causing the plan to be overfunded.
The case, Thole vs. U.S. Bank, was dismissed after a lower court and the 8th U.S. Circuit Court of Appeals said participants did not have statutory standing to assert breach of fiduciary because the participants had not suffered any individual financial harm and there were enough plan assets to cover benefits.
In June 2018, the plaintiffs asked the Supreme Court to review the 8th Circuit's decision , and the U.S. solicitor general's office urged taking the case on the question of whether plaintiffs have standing to sue without a monetary loss and to resolve disagreement on that question in lower courts.
. . .
The case has far-reaching implications for participants in defined benefit plans, said Michelle C. Yau, a partner at Cohen Milstein Sellers & Toll, co-counsel for the plaintiffs. "Plan participants should be able to hold fiduciaries accountable for reckless practices that put their retirement security at risk," Ms. Yau said.
The complete article can be viewed here.