The Fourth Circuit held last Friday that a participant in an insolvent pension plan doesn’t lose standing to sue when the government takes it over. Wilmington Shipping Co. v. New England Life Ins. Co., No. 06-2052 (4th Cir Aug. 3, 2007).
Peter Brown Ruffin, Jr., alleged that he lost benefits from his employer’s plan as a result of New England Life’s poor plan management. (NEL invested most plan assets in real estate — bad real estate!) NEL won summary judgment on the ground that Ruffin lacked standing. But the Fourth Circuit reversed, holding that the takeover of the plan by the Pension Benefit Guaranty Corporation didn’t deprive Ruffin of his right to sue under section 502(a)(2) of ERISA.