Recently, the Supreme Court handed down a unanimous opinion in the case of Fifth Third Bancorp v. Dudenhoeffer, rejecting a long-standing rule that fiduciaries of individual account plans are entitled to a "presumption of prudence" when employer stock is offered as an investment option.
The court's ruling impacts 401(k) plans that offer employer stock as an investment option as well as employee stock ownership plans that invest primarily in employer stock.
Many employers offering employer stock as an investment option in a 401(k) plan have been subject to class action lawsuits arising from a substantial drop in their stock price, causing participants to claim that the employer breached its duty of prudence and loyalty by allowing continued investment in the stock.
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
