Supreme Court Rules Defined Benefit Plan Members Cannot Sue Fiduciaries if Payments Unaffected
Attorneys Todd Wozniak, Lindsey Camp and Darcie Thompson wrote an article published in Employee Benefit Plan Review analyzing a recent Supreme Court decision affirming that defined benefit plan participants lack standing to sue for fiduciary breach if their payments remain unaffected. In the case, the plaintiffs argued that plan fiduciaries violated their ERISA duties of loyalty and prudence through making risky investments. The Court's decision hinged on the difference between defined benefit plans and defined contribution plans. In defined benefit plans, retirees receive a fixed monthly payment, regardless of the plan's performance, whereas in defined contribution plans, benefits depend on investment decisions. Because the plaintiffs participated in a defined benefit plan, they would receive the same benefits regardless of the outcome of the case. The Court thus determined that there was no concrete injury and that the plaintiffs had no standing to sue, affirming the case's dismissal.