The US Supreme Court recently released a decision of great importance in relation to tax-qualified retirement plans commonly known as employee stock ownership plans (ESOPs). The case is Fifth Third Bancorp et al v. Dudenhoeffer et al., No. 12-571, June 25, 2014.
The main holding in this case relates to the mechanics of litigation. If an ERISA breach of fiduciary claim is filed against an ESOP trustee (or other plan fiduciary), the fiduciary does not have a “special presumption” that the holding of, or purchase of, employer securities is or was prudent. Nevertheless, subsequent parts of the Supreme Court’s ruling could be viewed as a bit more favorable for ESOP fiduciaries. The attached publication has more details.