Wednesday, February 20, 2008

Latest 401(K) news

We've been talking a lot lately about the cases the Supreme Court would hear but one ruling they just came out on dealt with 401(K)s...

According to MSNBC (via AP): click here

The issue in the LaRue case was whether the Employee Retirement Income Security Act permits an individual account holder to sue plan administrators for breaching their fiduciary duties.

The language of the law refers to recovering money for the “plan” rather than for an individual, raising the question of whether a participant can sue solely for himself.

Justice John Paul Stevens, in his opinion for the court, said that such lawsuits are allowed. “Fiduciary misconduct need not threaten the solvency of the entire plan to reduce benefits below the amount that participants would otherwise receive,” Stevens said.

Business owners supported LaRue's employers and you wonder what repercussions this plan will have on future 401(K) offerings from employers and how many lawsuits will follow this decision...

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