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No Standing To Pursue Fiduciary-Breach Claim Where Plan Became Overfunded During Litigation
Wednesday, November 1, 2017

The Eighth Circuit held that defined benefit pension plan participants who alleged breach of fiduciary duty and prohibited transaction claims under ERISA lacked standing to assert their claims because, during the course of the litigation, the plan became overfunded. Plaintiffs brought suit after the plan lost $1.1 billion, which plaintiffs claimed arose from imprudent investments and caused the plan to go from being significantly overfunded to being 84% funded. During the course of the litigation, the plan recovered from the losses and returned to an overfunded status.  Defendants moved to dismiss on the ground that plaintiffs had suffered no harm. The Eighth Circuit agreed and held that “when a plan is overfunded, a participant in a defined benefit plan no longer falls within the class of plaintiffs authorized under [ERISA] to bring suit claiming liability . . . for alleged breaches of fiduciary duties.” The case is Thole v. U.S. Bank, Nat’l Ass’n, No. 16-1928, 2017 WL 4544953 (8th Cir. Oct. 12, 2017).

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