Appellate Court Approves Class Status for Defined Contribution Participants

A Federal appellate court ruled that it may be appropriate for a class of defined contribution plan participants to file a suit for relief under ERISA. In January 2011, Circuit Judge Diane Wood released the opinion from a three judge panel of the 7th US Circuit Court of Appeals calling for the courts to re-examine relief provisions available under ERISA.

In 2008, the US Supreme Court decided that individual plan participants can seek relief under ERISA, although it was unclear if a class of participants can do the same. Judge Wood concluded that there are cases where the plan as a whole is injured at the same time as an individual employee. For example, this can happen when the entity responsible for investing the plan’s assets charges unreasonably high fees or when there had been reckless selection of investment options for participants.

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