3 important and intriguing cases including one inwhich a plan participant didn't recall reading the plan documents.(Photo: Shutterstock)

The Supreme Court will hear three separate cases brought underthe Employee Retirement Income Security Act this session, whichbegan on October 7.

Decisions on the critical questions raised likely won't behanded down until next June.

#1: Intel Corp. Investment Policy Committee v.Sulyma

As is often the case, the issue before the Supreme Court isnarrower than the claims first alleged against two Intel Corp. retirement plans by an employee inOctober 2015.

The Supreme Court will decide whether a 3-year statute oflimitation period in section 413(2) of ERISA bars the participant from bringing hisclaim.

The 3-year limit runs "from the earliest date on which theplaintiff had actual knowledge of the breach or violation,"according to section 413(2).

The original claim brought in the Northern District ofCalifornia alleged two retirement plans sponsored by Intel andoverseen by its Investment Policy Committee were imprudentlymanaged.

Both plans held proprietary offerings that included significantallocations to hedge funds and private equity funds.

The funds returned positive gains, but lagged those of equityindexes, which surged in the aftermath of the 2009 financialcrisis.

Intel successfully had the case dismissed as time-barred underthe 3-year limitation period.

The employee who brought the suit worked at Intel between 2010and 2012. He began receiving required plan documents on the QDIAtarget-date fund he was invested in in 2011. And in 2012, hereceived a required Summary Plan Description detailing theallocations to alternative investments, and the cost of the funds.Documents were available through a company portal.

When asked in depositions if he had reviewed the available plandocuments, the plaintiff admitted to visiting the portal, butrepeatedly testified that he did not "think" he reviewed thespecific plan documents.

In dismissing the case, the District Court ruled the plaintiffhad "actual knowledge" of the facts underlying his claims becausethey were disclosed in plan documents.

But the Ninth Circuit Court of Appeals reversed that decision.While it acknowledged the participant had sufficient informationavailable to him, the fact that he testified to not reading thedocuments, or not recalling reading them, meant that he did nothave actual knowledge of facts outside the 3-year window.

The question before the Supreme Court is critical and can beimagined to affect any sponsor of a retirement plan: Is it goodenough to simply provide necessary information in necessary plandocuments, or are sponsors required to assure plan participantsactually read the documents?

The case is slated for argument on December 4.

#2: Retirement Plans Committee of IBM v. Jander

The Supreme Court will revisit fiduciary management questionsspecific to employee stock ownership plans (ESOPs), whichwere first addressed in Fifth Third Bancorp v. Dudenhoeffer.

In October 2014, IBM divested its Microelectronics business,which it had valued at over $2 billion. The business had lost morethan $600 million a year between 2012 and 2014—it lost $720 millionin 2013.

Unable to find a buyer, IBM reached an agreement with achipmaker under which IBM paid the third party $1.5 billion and thethird party agreed to supply semiconductors to IBM.

At the close of the deal, IBM announced a $2.4 billionwrite-down and another $800 million in costs of the deal. By theend of the day the deal was announced, IBM's stock price droppedmore than $12 a share, or 7 percent of its value.

Two lawsuits were filed in the Southern District of New Yorkalleging company fiduciaries imprudently managed the ESOP byfailing to disclose the losses the Microelectronics unit wasincurring.

Both were dismissed on the grounds that earlier disclosure ofthe business' losses could have harmed investors and retirementsavers in the ESOP more than not disclosing them.

The Second Circuit Court of Appeals reversed the lower court,ruling that "no prudent fiduciary could have concluded that anearlier disclosure would have done more harm than good," accordingto analysis in the amicus brief filed by U.S. SolicitorGeneral.

The Solicitor General's brief did not advance the interests ofeither party, but did say the United States "has a substantialinterest in this Court's resolution of the question presented."

Arguments are scheduled for November 6.

#3: Thole v. U.S. Bank, N.A.

The Supreme Court will determine whether participants in adefined benefit plan can sue plan fiduciaries for mismanagement ofassets even though the plan's beneficiaries have not lost any benefits.

In the case originally filed in 2013, retiree participants inU.S. Bank's defined benefit plan alleged it was mismanaged between2007 and 2010, when assets were solely invested in equities,including mutual funds managed by a bank subsidiary.

By 2008, the plaintiffs alleged the plan had lost $1.1 billion,reducing the pension's funded status to 84 percent.

In May of 2013, as the case was in the discovery phase in theU.S. District Court for the District of Minnesota, U.S. Bank made a$311 million contribution to the plan, well in excess of itsrequired annual contribution, bringing the plan to a funded statusabove 100 percent.

The District Court dismissed the claim in December of 2015 onthe grounds that the plaintiffs' claims were moot, as the plan wasnow fully funded. The Court of Appeals for the Eighth Circuitupheld the decision.

In recommending the Supreme Court review the case, the U.S.Solicitor General said the question of whether or not participantsin an over-funded defined benefit plan have standing to sue underERISA has "generated tension, if not an outright conflict," amongcourts of appeals, and said most lower courts have decided theissue "incorrectly."

The Solicitor General did issue an opinion on the case in itsrecommendation to the High Court.

The plaintiffs in the U.S. Bank case are "squarely within theclass of plaintiffs Congress has authorized to sue under ERISA,"the Solicitor General's brief said.

"Nothing in the text of ERISA conditions a fiduciary's duties tobeneficiaries on whether the plan is a defined-benefit ordefined-contribution plan, or whether the plan is overfunded orunderfunded," the Solicitor General said.

Arguments have yet to be scheduled.

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