Former Employees Who Have Received Their Retirement Benefits May Sue For The Reduced Value Of The Benefits

Employees who have received their lump-sum retirement benefits may sue for breaches of fiduciary duty that reduced value of those benefits, the First Circuit ruled recently in Evans v Akers (No. 07-1140).   The key issue, the court explained, was whether a former employee, despite having already received pay-out of their benefits, was a "participant" of the retirement plan within the federal ERISA law.  A "participant" in an ERISA plan includes a former employee that has colorable claim that she will prevail in a suit for benefits under Supreme Court precedent.  A right to benefits, the court continued, includes an entitlement to prudent management.  Because the plaintiffs were participants in the plan when its value was reduced by imprudent management, they could sue to recover the reduced amount of their benefits.  

Robert L. Abell
www.RobertAbellLaw.com