Title: The Times Are "A-Changing" towards a Living Statute Jurisprudence in ERISA
Abstract: INTRODUCTIONEmployer-sponsored employee benefit plans are an integral component of an employee's compensation package.' In 2007, 81.9 million workers worked for an employer that sponsored a retirement plan.2 Of these 81.9 million workers, 80.1% participated in an employment-based retirement plan.3 Furthermore, in the last decade, assets in employer-sponsored pension plans have experienced substantial growth.4 As of the end of December 2006, pension fund assets reached $5.7 trillion, up 149% from the end of 1994.5To protect employees from employer abuses and mismanagement of employee benefit plans, Congress enacted the Employee Retirement Income Act of 1974 (ERISA).6 Sections 502(a)7 and 409(a)8 of ERISA provide the exclusive remedy for employees with claims involving the misuse and mismanagement of employee benefit plans.9 Under these provisions, aggrieved plan participants of employee benefit plans may recover benefits due under the terms of the plan,10 recover from the plan's fiduciary for losses to the plan caused by a breach of fiduciary duty, and obtain other appropriate equitable relief.12 Because of ERISA's preemption provision,13 aggrieved plan participants of employee benefit plans cannot seek additional remedies available under state law causes of action.14For many years, aggrieved plan participants have asked courts to interpret sections 502(a) and 409(a) of ERISA to protect the rights of individual employees participating in employee benefit plans, as opposed to only protecting the assets of the entire plan.15 Until recently, the United States Supreme Court has consistently denied individual relief under ERISA on the grounds that ERISA does not contemplate such relief. In LaRue v. DeWolff, Boberg & Associates, Inc., however, the Supreme Court departed from its longstanding strict interpretation of sections 502(a) and 409(a) and held that ERISA authorizes individual employees to seek relief for breaches of an employer's duty to manage an employee benefit plan in the employee's best interest.16 In reaching this conclusion, the Court recognized the changing landscape of pension plans and indicated that the ideals of ERISA embody a living and dynamic commitment, not a static or historically bound idea.17This Article examines the Supreme Court's reasoning in LaRue and the possible impact that a new interpretation of sections 502(a) and 409(a) may have on the regulation of employee benefit plans.18 Part I of this Article provides a brief history of ERISA, examines ERISA's fiduciary obligations20 and enforcement provisions,21 and then analyzes the Supreme Court's jurisprudence under sections 502(a) and 409(a) of ERISA.22 Part II briefly describes the changing landscape of employee benefit plans. Part III analyzes the LaRue case, and finally, Part IV examines the possible impact that the LaRue decision may have on the administration and regulation of defined contribution plans and defined benefit plans under ERISA.I. BACKGROUNDIn 1974, Congress enacted ERISA to advance the legal rights of employees and to protect the economic investment of employees with assets accumulated in employer- sponsored employee benefit plans.23 To this end, ERISA requires employee benefit plans to conform to a myriad of reporting, disclosure, participation, vesting, and funding requirements and fiduciary responsibilities.24 Section A of this Part provides a brief history of ERISA and the major problems of pre-ERISA regulation of employee benefit plans. Section B examines the fiduciary duties that ERISA imposes on individuals who manage employee benefit plans. Section C examines how employees participating in employee benefit plans can exercise their rights and seek remedies under ERISA's civil enforcement provisions for breach of fiduciary obligations. Finally, section D analyzes the Supreme Court's jurisprudence under sections 502(a) and 409(a) of ERISA.A. ERISA: A Brief HistoryAs noted above, Congress enacted ERISA to ensure the proper administration of employee benefit plans. …
Publication Year: 2009
Publication Date: 2009-10-01
Language: en
Type: article
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