Former employees who maintained accounts in defined contribution 401(k) retirement plans voluntarily sought and obtained full distribution of the vested benefits in their respective accounts brought suit against the fiduciaries of their respective retirement plans based on the fiduciaries’ knowing investment in mutual funds that allowed investors to practice market timing, an abusive form of arbitrage activity that favored the market timers and harmed long-term investors in the funds. The defendants filed motions to dismiss statutory standing and Article III grounds on the basis that, having cashed-out of the plans, the plaintiffs were no longer seeking “benefits” but money damages. The U.S. Fourth Circuit Court of Appeals held that “cashed-out former employees remain ‘participants’ in defined contribution retirement plans for purposes of Section 502(a)(2) of ERISA when they seek to recover amounts that they claim should have been in their accounts had it not been for alleged fiduciary impropriety, we find that they have statutory standing. And because the plans at issue are defined contribution plans, rather than defined benefit plans, we reject the defendants’ argument that the plaintiffs’ injuries are not redressable and therefore that they lack Article III standing.” See In re Mutual Fund Investment Litigation, 529 F.3d 207 (4th Cir. 2008).
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