MetLife v. Glenn has engendered extensive discussion. However, so far, one aspect of this decision has gone unremarked: MetLife v. Glenn is one more unintended push from our legal system, nudging employers away from traditional defined benefit plans towards 401(k) plans and other similar defined contribution retirement arrangements.
After MetLife v. Glenn, the administrative decisions of employers sponsoring and administering defined benefit pensions will typically be subject to greater legal scrutiny than will be the administrative decisions of employers sponsoring and administering most 401(k) and similar individual account arrangements. This greater scrutiny incents employers to shift from their defined benefit pensions to defined contribution plans.
MetLife v. Glenn: Another Push for Defined Contribution Plans, Oxford University Press (June 30, 2008)
Edward A. Zelinsky, Morris and Annie Trachman Professor of Law at the Benjamin N. Cardozo School of Law of Yeshiva University, and author of The Origins of the Ownership Society: How The Defined Contribution Paradigm Changed America, shares his insight on the recent U.S. Supreme Court decision on discretionary grants in this recent article.
Professor Zelinsky explains consequences following from the decision restricts the ERISA fiduciary’s authority in his refreshingly succinct style. For the district courts that have not noticed yet, the MetLife opinion really does change the old rubberstamp judicial review paradigm.