Ruling could spark suits on 401(k) losses

@1. a BODY STYLES:WASHINGTON — The U.S. Supreme Court ruled Wednesday that employees with 401(k) plans can sue to recover losses when their savings are not handled in their best interest, a decision that could spark claims against the retirement system that now predominates in the workplace.

More than 50 million workers have more than $3 trillion invested in 401(k) and similar retirement plans that rely heavily on employee contributions and do not guarantee benefits.

In the Supreme Court case, an employee named James LaRue claimed that the Texas consulting firm that employed him failed to follow his instructions to shift his investments, costing him $150,000. Some experts said the decision could have far-reaching effects.

“This opens the door” to lawsuits in such contentious areas as fees charged by 401(k) and similar plans, and perhaps cases in which the share values of company stock take a plunge,” said Ed Ferrigno, vice president of the Profit Sharing 401(k) Council of America.

Ferrigno said his 401(k) organization, which represents 1,200 companies whose plans cover 6 million workers, recognized the legitimate rights of workers. At the same time, he said, employers “don’t want to be the victim of frivolous lawsuits.”