WASHINGTON, D.C.—Stephen W. Hall, Legal Director and Securities Specialist for Better Markets, released the following statement after Better Markets joined with AARP and other prominent public interest groups on a Supreme Court amicus brief filed today in the case of Hughes v. Northwestern University:
“The Supreme Court has an opportunity to improve the lives of countless retirement savers by giving them a chance to hold those who administer retirement plans accountable when they breach their fiduciary duties. That’s what’s at stake in the Hughes case, which the Court will decide this coming term. It’s all the more important as the retirement crisis in this country intensifies and Americans increasingly rely on prudent administration of their 401(k)’s to close the gap between their savings and what they’ll need to live in retirement.
“Hughes and the other plaintiffs allege that they suffered losses because their retirement plan administrators failed to cull investment options with bloated fees and poor performance. That was a breach of the administrator’s duty to monitor plan investments and remove the imprudent ones. The district court and the Seventh Circuit tossed them out of court, holding in part that the plan fiduciaries were absolved because the plan included at least some prudent investment options among the bewildering array of some 200 available choices.
“In our brief, led by AARP, we urge the Supreme Court to reverse the lower court’s decision, restore the plaintiffs’ claims, and give them a chance to prove their case. As we argued, the decision from the appellate court misinterprets the duty to monitor investments and applies an unfair and overly stringent pleading standard. It also undermines Congress’s core objective in the applicable statute, ERISA, which was to protect retirement plan participants from abuses by plan fiduciaries. Unless the Supreme Court reserves the Seventh Circuit, private enforcement of the law will suffer a major blow, weakening deterrence and exposing retirement savers to a heightened risk of unrecoverable loss when plan administrators fail to discharge their responsibilities.”
Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.com.