Mercer Select US - Appeals court finds LaRue does not apply in cash balance fiduciary breach case

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Appeals court finds LaRue does not apply in cash balance fiduciary breach case

A cash balance plan participant has no fiduciary breach claim arising from the denial of a lump sum payment, the Second Circuit Court of Appeals ruled (Fisher v. Penn Traffic Co., unpublished), concluding that the Supreme Court's decision in LaRue v. DeWolff did not apply. LaRue recognized the right of a defined contribution participant to recover for individual losses due to fiduciary breach. The Second Circuit noted that a cash balance plan was not an individual account plan, so fiduciary breach remedies are available only to protect the entire plan, not the rights of one participant. (Select News, 9 Apr 2009)

Full text of Fisher v. Penn Traffic Co. (unpublished) (2nd Cir., 2 Apr 2009) (PDF)

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