Beginning of the end for your 401K

[Gaspar]

The Supreme Court just ruled in favor of a man suing his 401K because he lost money.  

This is going to be a bombshell.  Gotta get online and watch what the market does.  Wait a minute!  I am online!  

See ya!

[Double A]

Try reading a little bit further than the headline before posting.

"James LaRue of Southlake, Texas, said the value of his stock market holdings plunged $150,000 when administrators at his retirement plan failed to follow his instructions to switch to safer investments."

If your administrator was in in breach of their fiduciary duties and ignored your instructions for how to administer your investments, you don't think you should have the right to sue to recover your losses due to their negligence? Are you one of these incompetent administrators whose a** is now on the line due to this ruling?

[Gaspar]

quote:Originally posted by Double A

Try reading a little bit further than the headline before posting.

"James LaRue of Southlake, Texas, said the value of his stock market holdings plunged $150,000 when administrators at his retirement plan failed to follow his instructions to switch to safer investments."

If your administrator was in in breach of their fiduciary duties and ignored your instructions for how to administer your investments, you don't think you should have the right to sue to recover your losses due to their negligence? Are you one of these incompetent administrators whose a** is now on the line due to this ruling?

You're right.  I was just reading my AP RSS feed that comes across my screen.  It said nothing about the negligent administrator.  Damn misleading headlines!

[cannon_fodder]

He sued for Breach of Fiduciary Duty, not technically for his losses.  Here is a great summary of the case disposition:
http://www.oyez.org/cases/2000-2009/2007/2007_06_856/

The account holder thought the market was going to suffer and that he needed less risk.  He told his 401K administrator to transfer his assets to less risk.    They failed to do so and he suffered heavy losses.

The Court ruled today that the account holder can sue the administration company under ERISA for breach of fiduciary duty if they knowingly or negligently failed to follow investor instructions.  Previous case law only clarified that a class of investors could sue the plan for breach of duty as a whole - this asserts the individual right.  

The ruling makes sense to me.  ERISA doesn't make exceptions to the common law nor statutory fiduciary duties and if they are breach the company should be liable.  Enforcement of such policies is more efficient than another layer of government oversight not to mention within the basic construct of justice (they wronged me, they owe me).

I have read no remarks making comment on the merits of this particular claim.