Thursday, February 21, 2008
Supreme Court allows suits over mishandled 401(k) instructions
Linda Greenhouse has a story on page C1 "Business Day" of The New York Times today (Feb. 21), "Top Court Allows Suit Over 401(k)," link here. The case is LaRue v. Wolfe, Boberg & Associates, et. al., Findlaw opinion here. There is also a slip opinion link on the Supreme Court website, here.
A similar front page story today in The Washington Post by Carrie Johnson, "Supreme Court Rules Employees Can Sue Over 401(k) Misconduct," is here. The Post editorial is "A Victory for Workers: The Supreme Court allows employees to sue their retirement plans," link here.
An earlier ruling back in 1985 had confined plan administrator responsibility to the health of a retirement plan itself. There was never much doubt that the ERISA (Employee Retirement Security Act of 1974) requires this. But the concept had been based on how defined benefit plans (conventional pensions) work. This case was different in that it dealt with an individual person's 401K account being mishandled after specific instructions.