Argument analysis: Justices skeptical of claim that retirement-plan participants have “actual knowledge” of all facts included in disclosure documents

Abstract

The Supreme Court heard oral argument on Wednesday in Intel Corp. Investment Policy Committee v. Sulyma, a case that puts a spotlight on the disclosures that retirement plans provide to plan participants. Under the Employee Retirement Income Security Act of 1974 (ERISA), participants in employer-sponsored retirement plans have the right to challenge the prudence of decisions that plan fiduciaries make about the investment options available through the plan. ERISA sets time limits for bringing such suits. Section 413(1) of ERISA gives plaintiffs six years after the end of the fiduciary breach, violation or omission. Section 413(2) imposes a shorter three-year limit when a plaintiff has “actual knowledge” of the breach or violation. In that case, the clock starts on the earliest date on which the plaintiff had “actual knowledge” of the breach or violation. The question before the court was whether the three-year limit in ERISA Section 413(2) bars suit when the defendant – here the committees and individuals at Intel responsible for administering the retirement plans – disclosed the relevant plan information about the plan investments to the plaintiff more than three years before the plaintiff filed the complaint, but the plaintiff chose not to read or could not recall having read the information.