Employee Benefits Developments For February 2008

Qualified Retirement Plans

The U.S. Supreme Court held that a defined contribution plan participant may seek recovery under Section 502(a)(2) of the Employee Retirement Income Security Act of 1974 (ERISA), as amended for fiduciary breaches by plan fiduciaries that caused a reduction in the value of the participant's account. LaRue v. DeWolff Boberg & Associates, 2008 W.L. 440748 (February, 20, 2008). Although most plan sponsors probably already assumed that this was the law, there was a substantial argument under ERISA and prior case law that only the entire plan, not individuals, could seek recovery under Section 502(a)(2), which provides broad recovery rights, including the right to recover lost profits. Justice Stevens, writing for a unanimous court, held that individual participants in defined contribution plans such as 401(k) plans, could seek recovery under this section of the law, even where