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December 2, 2021

The Supreme Court Should Give Retirement Savers the Chance to Prove Their Claims for Breach of Fiduciary Duty

FOR IMMEDIATE RELEASE
Thursday, December 2, 2021
Contact: Doug Walker at 202-618-6430 or dwalker@bettermarkets.org

WASHINGTON, D.C.—Stephen W. Hall, Legal Director and Securities Specialist for Better Markets, released the following statement ahead of Monday’s oral argument before the U.S. Supreme Court in the case of Hughes v. Northwestern University:

“The Court has an opportunity to improve the lives of countless retirement savers by reaffirming the powerful fiduciary duty applicable to retirement plan administrators. Hughes and the other plaintiffs have made out a strong case that they suffered losses because their retirement plan administrators failed to cull bad 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. However, the federal district court and the Seventh Circuit tossed them out of court, misinterpreting the duty to monitor investments and applying an overly stringent pleading standard.

“As we argued in our joint amicus brief with AARP, the Consumer Federation of America, The National Employment Law Project, and the Pension Rights Center, reversing the lower courts and allowing the case to proceed is the right decision under the law. It would also further a key Congressional purpose in enacting ERISA, which is protecting retirement plan participants by providing ready access to the federal courts when fiduciaries abuse their positions of trust. If the Supreme Court were to affirm the lower court’s dismissal of the case, the plaintiffs would suffer irreparable and substantial harm. More broadly, other retirement plan participants sustaining similar forms of injury down the road will face higher hurdles to obtain relief.”

“Getting it right is 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 maintain a decent retirement. The Supreme Court should reverse the lower court’s decision, restore the plaintiffs’ claims, and give them a chance to prove their case. We hope that Monday’s oral argument will help steer the Justices to the right result.”

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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.org.

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