Tuesday, November 27, 2007
The Supreme Court held oral argument yesterday in a case that raises the issue of whether an employee can sue for losses in his 401(k) account if the administrator of the 401(k) plan mishandles the account. In LaRue v. DeWolff, Boberg & Associates, the administrator failed to follow the employee's instructions to switch mutual funds, resulting in a loss to the account. The Fourth Circuit rejected the employee's claim, finding that ERISA permits lawsuits only for improper management of the entire plan, not individual accounts. Several justices appeared uncomfortable with that distinction. The Department of Labor agreed with the employee's position. NYTimes, Justices Consider a Loss in a 401(k) Plan; WSJ, High Court Hears 401(k) Case.