Individuals may now sue 401(k) plans

The U.S. Supreme Court has unanimously ruled that individual participants can file lawsuits against plan administrators to recoup losses. Today’s decision will impact 50 million workers with $2.7 trillion invested in 401(k) plans. The case involves James LaRue of Southlake, Texas, who said the value of his stock holdings fell $150,000 when administrators at his retirement plan didn’t follow his instructions and switch to safer investments. The issue was whether the Employees Retirement Income Security Act allows an individual account holder to sue plan administrators who have allegedly breached their fiduciary duties. The language of the law refers to recovering money for the "plan" rather than for an individual. This raised the question of whether a participant could sue. The justices determined that lawsuits are allowed by individual participants.