401(k) Participants May Sue for Breach of Fiduciary Duty

In a closely watched case arising under the Employee Retirement Income Security Act of 1974, as amended ('ERISA'), the U.S. Supreme Court recently clarified the right of employees to sue plan fiduciaries for mismanaging their individual 401(k) accounts. Prior to the Supreme Court's clarification, the lower courts were divided as to whether certain remedies under Sections 502(a)(2) and 409 of ERISA (29 U.S.C. ' 1132(a)(2) and 29 U.S.C. ' 1109 respectively) allowed recovery for breaches by fiduciaries that affected only individual accounts, rather than the plan as a whole. In LaRue v. DeWolff, Boberg & Associates, Inc., 128 S. Ct. 467, 42 EBC 2857 (2008), the Supreme Court has now settled the issue, holding that ERISA authorizes a plan participant to recover for fiduciary breaches even if those breaches affect only the participant's individual account.