WASHINGTON--Individual participants in 401(k) retirement plans can sue under ERISA to recover their losses, the Supreme Court ruled yesterday in a case that has created concern within the insurance industry.

In a unanimous ruling (LaRue vs. DeWolf), the court said the Employee Retirement Income Security Act does permit an individual account holder to sue plan administrators for breaching their fiduciary duties.

The case revolved around language in ERISA that referred to recovering money for the retirement "plan," rather than an individual participant in the plan suing solely on his own behalf.

In the court's opinion, Justice John Paul Stevens said that such lawsuits are permissible.

"Fiduciary misconduct need not threaten the solvency of the entire plan to reduce benefits below the amount that participants would otherwise receive," Justice Stevens said. He added that ERISA "does authorize recovery for fiduciary breaches that impair the value of plan assets in a participant's individual account."

The decision reverses a ruling by the 4th U.S. Circuit Court of Appeals, based in Richmond, Va.

The American Council of Life Insurers filed a friend of the court brief in the case warning that providing plan members with the authority to sue independently could "have legal and practical ramifications extending far beyond the parties to this case."

In its brief, the ACLI through its lawyers warned that supporting the plaintiff "would expose ERISA fiduciaries to claims for monetary damages by plan participants based on losses allegedly suffered by individuals with respect to their benefit plan accounts."