Supreme Court Rules Defined Benefit Plan Members Cannot Sue Fiduciaries If Payments Unaffected

Article III standing requires a plaintiff to demonstrate a concrete injury caused by the defendant and that the injury would likely be redressed by the requested judicial relief. Because the Thole participants would receive the exact same benefits regardless of the outcome of the case, the Court rul...

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Bibliographic Details
Published in:Employee Benefit Plan Review 2020-07, Vol.74 (5), p.22-23
Main Authors: Wozniak, Todd D, Camp, Lindsey R, Thompson, Darcie
Format: Article
Language:English
Subjects:
Beneficiaries
Defined benefit plans
Defined contribution plans
Employee stock ownership plans
ERISA
ESOP
Fiduciaries
Investments
Litigation
Retirement income
State court decisions
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Summary:Article III standing requires a plaintiff to demonstrate a concrete injury caused by the defendant and that the injury would likely be redressed by the requested judicial relief. Because the Thole participants would receive the exact same benefits regardless of the outcome of the case, the Court ruled that the participants did not have a concrete stake in the claims asserted. A defined-benefit plan entitles a retiree to a fixed payment every month, irrespective of the plans financial performance or investment decisions, while a defined contribution plans (i.e., 401(k) plan) benefits often turn on the plans investment decisions. [...]these plaintiffs had received all monthly pension benefits to which they were entitled, and would continue to receive those plan benefits regardless of whether they won or lost the case. [...]Thole's holding restricts lawsuits by defined benefit plan participants when the plans are not underfunded and when the participants' benefits are not affected.
ISSN:0013-6808