Argument preview: Court to consider “actual knowledge” in determining the window for filing claims against retirement-plan fiduciaries

Abstract

Under the Employee Retirement Income Security Act of 1974 (ERISA), participants in employer-sponsored retirement plans – including 401(k) plans – have the right to challenge the prudence of decisions that plan fiduciaries make in selecting and managing the investment options available to participants. Participants must bring such suits within the time limits set by law. Section 413(1) of ERISA provides that claims must be brought within six years after the end of the fiduciary breach, violation or omission. Section 413(2) imposes a shorter limitation period when the participant has “actual knowledge” of the breach or violation. In such cases, the participant must bring the suit within three years from the earliest date on which the participant had “actual knowledge.”

Next week the Supreme Court will hear oral argument in Intel Corp. Investment Policy Committee v. Sulyma on the meaning of “actual knowledge.” Specifically, the justices will consider whether Section 413(2) bars suit when the defendant – here the committees and individuals at Intel responsible for administering the plans in a fiduciary capacity – disclosed the relevant plan information to the plaintiff – here a retirement-plan participant – 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.