The U. S. Supreme Court ruled 5-4 yesterday that workers can’t accuse pension plan administrators of mismanaging their retirement savings unless they have been harmed — such as by not receiving 100 percent of their promised pension payments — closing the door on a 7-year-old Employee Retirement Income Security Act (ERISA) case accusing U. S. Bank of squandering $750 million of its pension plan’s money by making risky investments, 401K Specialist reported. The SCOTUS decision in James J. Thole et al. v. U.S. Bank NA et al., could eliminate a wide range of fiduciary breach lawsuits by limiting the circumstances under which employees and retirees can sue. The plaintiffs in the case, James Thole and Sherry Smith, are retired participants in U.S. Bank’s defined-benefit retirement plan. Both have been paid all of their monthly pension benefits so far and are legally and contractually entitled to those payments for the rest of their lives. As such, the Supreme Court ruled that because Thole and Smith have no concrete stake in the lawsuit, they lack Article III standing, upholding a previous dismissal in U.S. District Court for the District of Minnesota and a decision by the U. S. Court of Appeals for the Eighth Circuit. “Of decisive importance to this case,” wrote Justice Brett Kavanaugh in delivering the opinion of the Court, “the plaintiffs’ retirement plan is a defined-benefit plan, not a defined-contribution plan. In a defined-benefit plan, retirees receive a fixed payment each month, and the payments do not fluctuate with the value of the plan or because of the plan fiduciaries’ good or bad investment decisions. By contrast, in a defined-contribution plan, such as a 401k plan, the retirees’ benefits are typically tied to the value of their accounts, and the benefits can turn on the plan fiduciaries’ particular investment decisions.”
