Last week, the U.S. Supreme Court ruled against Intel Corporation in, Intel Corporation Investment Policy Committee v. Sulyma, a case with potentially far reaching implications to employers who maintain Section 401(k) retirement plans.
The case involved a class action lawsuit brought by an Intel employee who claimed that Intel, Intel committees and individuals administering two Intel retirement plans had breached their fiduciary duties under ERISA, the federal law that governs such plans, by offering two investment funds that were imprudently overinvested in “alternative investments” such as hedge funds and private equity and failed to disclose relevant facts about those allocations to plan participants. This is but one of many similar class action ERISA lawsuits brought against large employers, universities and colleges. The Supreme Court decision focused on the time a plaintiff has to bring such a claim. ERISA Section 413 allows a plaintiff as long as six years to file suit following an alleged ERISA breach or violation. However, if a plaintiff has “actual knowledge” of a breach or violation, that period is reduced to three years.
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