The Law Planet Blog

There has been a huge shift in the United States from defined benefit retirement plans, where an employee is guaranteed a fixed payment upon retirement, to defined contribution plans, where the employee makes the contribution and maybe the employer makes a matching payment. Defined contribution plans are considered cheaper for the employer.

The best known defined contribution plan is the 401(k). In a 401(k), the employee contributes to the plan and chooses the investment strategy. A plan administrator offers a variety of investment vehicles, usually associated with mutual fund-type investments, and the employer may offer to match a percentage of the employee's contribution. The employer is called the plan sponsor.

There was some discussion in legal circles as to whether or not an employee, the "plan participant," could bring an action against the plan administrator regarding administration of the plan. ERISA lawyers, who are apparently immune to boredom, batted this around at some length for a while. The Supreme Court brought an end to this discussion and made a logical decision in my view.

In Larue v. DeWolff, the Supreme Court held that an administrator can be held liable to an individual participant, not just the plan, if the administrator screws up. Now how hard was that? Logic would tell you that if it's the participant's money, and the administrator is responsible for dealing directly with the participant, then the administrator has a problem if they/he/she don't listen to the participant's instructions, which was the case in LaRue.

This is what's wrong with the law. Logic gets suspended while egghead lawyers sit around and argue about the placement of a comma in a sentence or the meaning or a single word in a paragraph. Why couldn't someone just say "duh" (not "doh!")? I, for one, am glad to see that our Supreme Court got it right this time. Now, if we could only get Congress to worry about something other than flawed arbitration studies....

That's the view from The Law Planet - Jupiter, Florida.

Posted by Dobin & Jenks | Permalink | Email This Post

Posted In: Investments

Bookmark:

You may ask, what does a securities and employment firm like Dobin & Jenks, located in Jupiter, Florida, have to do with a girls' softball team in Royal Palm Beach, some 25 or 30 miles away? It's a long story, for which I will only brag about the highlights.

One of the softball boosters is the neighbor of one of our lawyers. I met this booster at a social function and he mentioned that the boys' baseball field has lights but the girls' team doesn't. He went on to explain how they have fofeited games on account of darkness. Now, I may not be sharpest knife in the drawer, but that didn't seem right, fair or legal.

We did some research, and Brian Buckstein of our office sent a letter to the school's principal. After a couple more letters, the School Board advised us that the boys were not permitted to use their lights until the girls' field was similarly equipped. We didn't like disadvantaging the boys in the process, but the two teams needed to be treated equally.

Over the summer and into the fall, the school board put up lights. The parents renovated other sections of the field and turned it into their "Field of Dreams." Brian, his family and I went to the first night game held at the field. It was gratifying to see tangible results of our successful work which, so often, is only represented in a check and a settlement agreement. The team was clearly enjoying its newly-refurbished home and we were glad to be a part of it.

By the way, the team won their first nighttime game.

That's the view from The Law Planet, Jupiter, Florida.

Posted by Dobin & Jenks | Permalink | Email This Post

Posted In: Items of Interest

Bookmark: