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Supreme Court petitioned on ERISA benefits issue

| Jan 29, 2019 | ERISA Benefits

The nation’s highest court may rule in Washington, D.C., on which party is responsible for proving loss causation when a dispute over the management of defined contribution benefit plans goes to court. One company currently involved in such a case appealed to the Supreme Court to settle the disparate approaches taken among federal appeals courts about who must prove losses when plan members file suit over fiduciary breaches of the Employment Retirement Income Security Act (ERISA), which protects employee benefits from misuse or fraud.

One company involved in an ERISA benefits dispute has requested that the Supreme Court rule on the issue to provide a definitive national framework for assessing loss causation. In six appellate courts, plaintiffs suing the fiduciaries of these plans have the burden of proof to show that losses were caused by fiduciary breaches of duty. On the other hand, four courts have ruled that the defendants must show that losses were not caused by any breaches of fiduciary duty. The petition noted that the high court is well-placed to resolve this fundamental divide that can mean similar cases are treated substantially differently, even under a uniform national law.

However, in the past, the Supreme Court has declined to hear other cases that may have brought finality to the topic. Associations representing benefits companies want plaintiffs to retain the burden of proof in these cases, but employment lawyers and advocates for retired people have supported the plan members seeking accountability for their lost benefits.

Employees rely on their retirement benefits for long-term security and safety, especially as defined-contribution plans have become standard in the industry. Mismanagement can lead to significant losses that put workers’ hard-earned benefits at risk. An employment benefits attorney can help a worker facing losses or denials of benefits file a claim and resolve the matter.

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