The Seventh Circuit today held that ERISA section 502(a)(2) allows ex-employees who cashed out their pension plan benefits to sue for losses to the plan. The court read the statutory definition of "participant" to include cash-outs who claim that, but-for a breach of fiduciary duty, they would have gotten more cash. Harzewski v. Guidant Corp., No. 06-3572 (7th Cir. June 5, 2007).
The case involved an imprudent investment in company stock. The plaintiffs alleged that the plan fiduciaries knew that the market overvalued the stock (as a result of securities fraud) and therefore should have sold it.