The following article by Brad Brewer was recently published in Transitions, March 2009, (Transitions).
Fiduciary liability is not a new topic, but the risks have increased as a result of a 2008 court ruling and the financial meltdown of the economy during 2008.
According to the fifth Annual Workplace Class Action Litigation Report by law firm Seyfarth Shaw LLP, for ERISA class actions, the monetary value of the top ten private plaintiff settlements entered into or paid in 2008 totaled $17.7 billion, compared with $1.8 billion in 2007. This article provides some background on the United States Supreme Court case making it easier for participants to file a lawsuit and measures a plan sponsor can take to mitigate their liability.
The United States Supreme Court decided the case of LaRue v DeWolff, Boberg & Associates, Inc. in the spring of 2008. The decision was unanimous, declaring that defined contribution participants can bring fiduciary breach lawsuits to recover individual damages...
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