U.S. top court will not review John Hancock retirement plans

Mon Oct 29, 2012 5:47pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

* Appeals addressed alleged fee abuses in 401(k) plans

* Federal appeals court had revived part of lawsuit

By Jonathan Stempel

WASHINGTON, Oct 29 (Reuters) - The U.S. Supreme Court refused on Monday to consider two appeals in a case weighing the ability of tens of millions of Americans to bring lawsuits over their retirement plans.

Without comment, the court let stand an April ruling by the 3rd U.S. Circuit Court of Appeals in Philadelphia that revived part of a case accusing John Hancock Life Insurance Co, a unit of Canada's Manulife Financial Corp, of charging excessive fees on annuity insurance contracts in 401(k) plans.

In its appeal, Hancock had warned that letting the lawsuit go forward could discourage employers from setting up retirement plans governed by the Employee Retirement Income Security Act of 1974 by driving up costs to account for litigation.

It said plans under that law in recent years have held more than $5 trillion of assets covering in excess of 86 million workers.

Gregory Ash, a partner specializing in employee benefits at Spencer Fane Britt & Browne in Overland Park, Kansas, said the decision helps 401(k) participants by letting them sue plan providers directly, rather than be forced to sue individual employers in many lawsuits.

"It is important - for this case, in particular, because it makes it a lot harder for John Hancock to make it go away," said Ash, who is not involved in the John Hancock case. "The settlement value (can be) a lot higher than if it were just the employees of one company."   Continued...