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ARTICLE · 11 SEPTEMBER 2013

Why DB Plan Participants Can’t Sue Actuaries

A recent decision involving a suit over investment actions of a defined benefit plan illustrates one of the reasons why participants in a DB plan cannot sue plan actuaries for mistakes — the participants have almost never been damaged.

United StatesEmployment and HR

A recent decision involving a suit over investment actions of a defined benefit plan illustrates one of the reasons why participants in a DB plan cannot sue plan actuaries for mistakes — the participants have almost never been damaged.  DB plan participants have a right to a fixed set of benefits, and how well the plan does on its investments or meeting its actuarial assumptions does not increase or decrease that set of benefits:

As the US District Court for the Western District of Washington recently stated in Palmason_v_Weyerhaeuser_Company

Misconduct by the administrators of a defined benefit plan will generally have no effect on an individual's payments under the plan. In order to establish the requisite personal  injury to pursue an award of monetary damages, the participants in such a plan must show that  the alleged breaches of fiduciary duty created an appreciable risk that the defined benefits would  not be paid. In other words, plaintiffs must show

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