For Immediate Release
Washington, DC – The ERISA Industry Committee (ERIC) has filed an amicus brief with the U.S. Supreme Court in James J. Thole v. U.S. Bank N.A., asking the Court to uphold the U.S. Court of Appeals for the Eighth Circuit’s decision that the plaintiffs did not have the legal right to sue and the statute of limitations had run out on the ERISA claims. The brief was filed jointly with the Chamber of Commerce of the United States of America and American Benefits Council.
The amicus brief argues that participants in a defined benefit retirement plan do not have standing under Article III for a breach of fiduciary duty under the Employee Retirement Income Security Act of 1974 (ERISA), unless the alleged breach greatly increases the risk that the participant will not receive the promised benefit. The brief further explains that the investment risk in a defined benefit plan is largely born by the employer who must make additional contributions if an investment strategy fails to meet the plan’s funding requirements. As such, a breach of fiduciary duty under ERISA in a defined benefit plan would occur only where the participant can show that there is a risk of the promised benefit not being paid. The plaintiffs in this case could not show, and still cannot prove, that they were at risk of not receiving promised benefits since the plan is and has been overfunded since 2014.
“It is important for the Supreme Court to recognize that employers voluntarily offer retirement plans as a way to retain and attract employees, but if lawsuits like Thole v. U.S. Bank N.A. are allowed to continue employers may be dissuaded from offering these benefits,” said Aliya Robinson, Senior Vice President of Retirement and Compensation Policy, ERIC.
As the only national association exclusively representing the large plan sponsor perspective, it was imperative for ERIC to file this brief. Plan sponsors voluntarily offer retirement benefits and a Supreme Court decision allowing potentially more damaging and frivolous lawsuits would discourage employers from continuing to offer these benefits.
Click here to read ERIC’s amicus brief.