On June 1, 2020, the U.S. Supreme Court held in Thole v. U.S. Bank, N.A., that defined benefit plan participants lack standing under Article III to pursue claims of fiduciary breach when the plan is fully funded.
Background
Plaintiffs were fully vested retired participants in U.S. Bank’s defined benefit retirement plan and filed suit against the bank and other plan fiduciaries for allegedly mismanaging plan assets and breaching their fiduciary duties of care and prudence under the Employee Retirement Income Security Act of 1974 (ERISA).
A district court dismissed the suit, which was appealed to the U.S. Court of Appeals for the Eighth Circuit. The Eighth Circuit affirmed the district court ruling, finding that the plaintiffs lacked statutory standing under ERISA since the plaintiffs did not suffer any actual losses.
High Court Decision
Under ERISA, a plan participant must establish both statutory and constitutional standing as a condition of filing suit. The Supreme Court stated that in order to establish constitutional standing, a plan participant must show that:
- He or she suffered an actual or imminent concrete injury;
- The defendant caused the injury; and
- The injury could be cured by judicial relief.
