A new Supreme Court decision has just added another reason to make sure the beneficiary designations on your...Read more
Supreme Court Says Individuals Can Sue Over 401(k) Losses
- February 21st, 2008
In a unanimous decision, the Supreme Court on Tuesday ruled that employees can sue their employers to recover loses from the mismanagement of a 401(k) plan. The decision, a reversal of the lower court, has implications for the more than 50 million individuals who have more than $3 trillion invested in retirement plans.
James LaRue sued his former employer under the Employee Retirement Income Security Act of 1974 (ERISA), alleging that he asked his employer to make certain changes to the investments in his individual account, but the employer never carried out these directions. LaRue claimed the employer's inaction cost him approximately $150,000. The U.S. Court of Appeals for the Fourth Circuit ruled that employers were not liable for losses suffered by their employees, even if the retirement accounts had been mismanaged. According to the court, ERISA "provides remedies only for entire plans, not for individuals."
In a decision written by Justice John Paul Stevens, the U.S. Supreme Court overturned the Fourth Circuit's decision. Stevens recognized that the retirement landscape has changed since prior decisions on this issue, with 401(k) plans increasing in popularity. Because 401(k) plans have individual accounts, Steven's wrote, an individual employee can sue his or her employer for mismanagement of the employee's account even if the entire plan is not affected.
To read the full decision in LaRue v. DeWolff, 552 U. S. ____ (2008), click here.
Local Elder Law Attorneys in Ashburn, VA
Needham Mitnick & Pollack, PLC
Susan Pollack served as Chairperson of the Falls Church Senior Citizens Commission from 1997 to 2011 and was on the Executive Board of the Falls Church Education Foundation. She has also served on the Board of Directors of the Alzheimer’s Association of the National Capital Area and is a member of the Arlington B...
Margaret A. O'Reilly, PC
Margaret A. O’Reilly is an estate planning and elder law attorney with over thirty-five years of legal experience. Attorney O’Reilly graduated from Duke University with a degree in psychology, and received her law degree from Northeastern University School of Law in Boston, Massachusetts. For over 15 y...
Law Offices of John L. Laster
John Laster is a lawyer licensed to practice in Virginia, Maryland and the District of Columbia. He limits his practice to wealth transfer planning, trusts, wills, powers of attorney, health care decision-making issues, estate administration and related tax, elder law and disability concerns. Listed in The Best Lawyers...