I continue to add related links to the LaRue v. DeWolff, Boberg & Assoc. Inc., No. 06-856 (Feb. 20, 2008) post. One of the related links, Supreme Court Expands Remedies Available for ERISA Fiduciary Breach Claims, discusses the impact on fiduciaries and sponsors:

"Plan fiduciaries and administrators can take several precautionary steps in an attempt to ward off new lawsuits based on LaRue and to provide potential defenses if new litigation is filed. Fiduciaries should first review their current plan administration and account investment processes to ensure that all steps are being taken to avoid administrative errors affecting plan participants' accounts. Proper and diligent administration is generally the best defense against potential litigation.

However, even with the best procedures in place, administrative mistakes do occur. If fiduciaries learn of investment errors or other administrative claims involving individual benefit decisions, administrators may attempt to rely on Chief Justice Roberts' concurring opinion and treat any challenges to administrative or investment errors as claims for benefits under the plan. By treating these issues as garden-variety benefit claims, the plan administrator can require the participant to first exhaust administrative remedies, giving the plan the opportunity to determine whether any errors have occurred before litigation is filed. If the claims are denied, the plan administrator can argue in litigation that the decision and any interpretations of plan terms should be reviewed under a deferential standard of review. If a claim is viable, the plan administrator may grant the benefit claim during the administrative review, which can save litigation defense costs and avoid payment of attorneys' fees to the participant's lawyer if litigation is commenced.

Finally, employers should review their existing fiduciary insurance coverage to determine whether it is sufficient if the amount of ERISA fiduciary breach litigation increases, or consider purchasing fiduciary coverage if none is in place. Any increase in fiduciary litigation could become very costly for employers, and fiduciary insurance policies may have limits that could be quickly reached if the number of lawsuits against any plan increases greatly."

The LaRue v. DeWolff, Boberg & Assoc. Inc., No. 06-856 (Feb. 20, 2008) post contains additional information about immediate concerns and recommendations.