Supremes hear 401(k) case

Although U.S. workers can invest money in a retirement fund sponsoredby their employer, it is not clear whether they can sue to recovermoney lost because of mistakes by the fund’s administrator. That issue came before the Supreme Court on Monday in a case that could shape the pension rights of 70 million employees.  The case began when James LaRue, amanagement consultant from Texas, said he lost $150,000 from his 401(k)retirement account when the plan’s administrators ignored hisinstructions to move his money from a high-risk stock fund intogovernment bonds in 2001. LaRue sued his employer, DeWolff, Boberg& Associates, but his claim was thrown out before a trial because,according to the lower courts, the federal law governing pensions andbenefits does not allow individuals to sue over losses in theirretirement accounts.  His case prompted the high court to reexamine the federal pension lawin an era when employees — not their employers — are responsible fordeciding where their retirement funds will be invested.  In 1974, Congress adopted federal rules for employer-sponsored pensionfunds and health benefits in the Employee Retirement Income SecurityAct. In the decades since, the high court has interpreted thisworker-protection law to bar employees from suing their employers overbenefit claims. For example, the court said employees and theirfamilies could not sue for damages if their healthcare plan refused topay for a needed medical treatment.

Source/more:  LA Times, http://www.latimes.com/news/nationworld/nation/la-na-scotus27nov27,1,1269671.story?ctrack=2&cset=true

Read the briefs:  http://www.abanet.org/publiced/preview/briefs/dec07.shtml#larue