A Supreme Court decision this week on employer pensions? Yes, indeed.

The ruling itself

Earlier this week, the Supreme Court handed down its decision in Thole v. U.S. Bank, a case in which two retirees in the U.S. Bank pension plan contended, as part of a class action, that U.S. Bank had violated its fiduciary duty in mismanaging its pension plan from 2007 to 2010, causing its assets to crash. (See Reason and 401K Specialist for summaries.) The plaintiffs wanted the company to be forced to pay into the plan the $750 million in losses that they alleged had been the result of this mismanagement — but the reality is that, right now (or, rather as of the date of the last Schedule B, in 2018), the plan is/was overfunded, so that any deficiencies that existed a decade ago are a non-issue. (Yes, the plan’s funded status is worse now after the corona-crash, but different management in the earlier period would not have meant a larger surplus now; instead, the plan remedied deficits in the intervening years.)

And the court’s decision, in a 5-4 ruling written by Justice Kavanaugh, was that these retirees simply didn’t have standing because they could not point to any actual harm they experienced, because plan sponsors are required to rectify any deficits as, in fact, occurred. The dissenting opinion, by Justice Sotomayor, rejected the notion that a plaintiff in such a lawsuit must be able to show actual harm; it is instead sufficient that they were wronged because the company had a duty to manage the trust appropriately. The Pension Rights Center’s director Karen Ferguson had this to say:

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