The Supreme Court has ruled that an employee can sue an employer for mishandling his or her 401(k) account.
In the case, an employee asked his employer, a consulting firm, to switch from one mutual fund to another, but the employer never made the change. The employee argued that the mistake cost him $150,000 in lost profits.
The Employee Retirement Income Security Act allows the recovery of "any losses to the plan" that were caused by a fiduciary breach.
The question before the Supreme Court was whether that provision applies to losses to an individual account.
The Supreme Court held that although "§502(a)(2) [of the Employee Retirement Income Security Act] does not provide a remedy for individual injuries distinct from plan injuries, that provision does authorize recovery for fiduciary breaches that impair the value of plan assets in a participant's individual account. Accordingly, the judgment of the Court of Appeals is vacated, and the case is remanded for further proceedings consistent with this opinion."