An article in today's Wall Street Journal [subscription required], entitled "Ruling allows workers to sue on 401(k) losses," examines a unanimous ruling by the U.S. Supreme Court, upholding the right of workers to sue over losses in their 401(k) retirement-savings accounts in some circumstances.With the stock market showing a lot of volatility and many retirement accounts in the red, employees mind find some solace in this recent ruling. The Journal quoted Gregory Ash, a pension attorney as saying, "Employers -- or whoever they appoint in their stead -- have an established obligation to run retirement plans as `prudent experts' on behalf of participants. Failure to do so can invite litigation."
Employers were charged with accusations that employees were offered subpar investment options and were charged prohibitive fees to make changes.
Before employees get too excited, the same article cites a minority opinion that may provide the ballast for employers to defend themselves against such claims.
Regardless, retirement advocates and investors should be pleased.
Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.
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