Wednesday, February 27, 2008
Employee Retirement Income Security Act Now Packs a Punch
Last week, in LaRue v. DeWolff the Supreme Court unanimously ruled that participants in most 401(k) plans do, in fact, have the right to sue firms in the event of account mismanagement. This decision is of particular importance because not only did the Justices actually reach a unanimous decision, but they also overturned two decades of precedent.
As retirement income becomes a monumental concern, this ruling will become increasingly relied upon. The volatile economy coupled with resource scarcity and vulnerability faced by workers and elders make LaRue v. DeWolff decision very timely.
The Court’s intention was to provide a framework for accountability which was reflected in the vagueness of the ruling and the variety in their opinions. For us, this means that 401(k) participants and investment firms will spend the next few months battling it out so-to-speak in terms of what this ruling means in application.
Consumer protection has always prompted corporate push-back so until the dust settles, be extra cautious…your retirement depends on it!
Comments please: Do you think this ruling will affect retirees positively - offering them a protection safety-net or negatively by driving up the prices of 401(k) management?
Posted by The Elder Economic Security Team at 12:50 PM