March 31, 2008
The Supreme Court recently held that the Employee Retirement and Income Security Act of 1974 (“ERISA”), which is the federal law that protects pensions and other employee benefits, affords a remedy to an individual participant in a defined contribution plan that suffered investment losses to his plan account due to a breach by the plan’s fiduciaries. LaRue v. DeWolff Boberg & Assocs. Inc., No. 06-0856 (2008). This decision marks a significant expansion of the liability faced by plan fiduciaries in the United States.
In LaRue v. DeWolff Boberg & Assocs. Inc., No. 06-0856 (2008), the plaintiff, James LaRue, a participant in a 401(k) plan administered by his former employer, requested that the plan administrators change his investment options for his individual account in 2001 and 2002. The plan administrators failed to make these changes, and his individual account allegedly suffered losses of approximately $150,000. James LaRue then sued in 2004 for the resulting loss alleging that the respondents acting in a fiduciary capacity, failed to properly invest the assets allocated to his 401(k) plan account thereby causing it to diminish in value.
The U.S. Supreme Court held that the Employee Retirement and Income Security Act of 1974 (“ERISA”) affords a remedy to an individual participant in a defined contribution plan that suffered investment losses to his plan account due to a breach by the plan’s fiduciaries. This decision marks a significant expansion of the liability faced by plan fiduciaries in the United States.