A former employee who has “cashed out” his 401(k) plan still has standing to sue the administrator of the plan under ERISA for alleged mismanagement of the fund, the 3rd U.S. Circuit Court of Appeals has ruled.
In its 26-page opinion in Graden v. Conexant Systems Inc., a unanimous three-judge panel reversed a lower court’s decision to dismiss Howard Graden’s suit on the grounds that such a former employee, once he is cashed out, is no longer a “participant” in the plan and has therefore lost standing under the Employee Retirement Income Security Act.
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