The Supreme Courts recent decision in LaRue v DeWolff to permit workers in 401(k) plans to sue administrators for high fees will inevitably lead to lower feesand the end of the retail mutual fund industrys dominance of the market. Thats the strong opinion of widely quoted, and frequent financial TV guest Ric Edelman.
This past February, the Supreme Court ruled in favor of James LaRue, a worker suing the administrators of his 401(k) pension plan on breach of fiduciary duties, Edelman, a financial planner, notes. LaRue claimed that DeWolff, Boberg & Associates, Inc. ignored LaRues instruction to change to more stable investments, eventually leading to depletion of his pension by approximately $150,000. The Supreme Court ruled that this was a breach of fiduciary duty under the Employee Retirement Income Security Act (ERISA).