By Hal M. Bundrick NEW YORK ( MainStreet)--Americans who depend on their 401(k) plans to build their retirement savings are certainly sensitive to losses. Market setbacks are one thing, but losses attributed to unsuitable investments are quite another. A recent ruling by the United States Court of Appeals for the Seventh Circuit is a case in point. Participants in the 401(k) retirement plans sponsored by the Lockheed Martin Corporation have sued for breach of fiduciary duty due to losses garnered by a specific investment option offered in the plan. And the federal court has allowed the matter to proceed. "The Lockheed Martin 401(k) plans are among the largest in the United States," Carol Buckman, an employee benefits attorney, writes in an article for Pensions & Benefits Law. "Lockheed Martin's plans offered a stable value fund (SVF), which is intended to provide higher returns than money market funds with stability provided through principal and interest guarantees. Participants who invested in the Lockheed SVF sued Lockheed and its internal investment manager claiming the fund was an imprudent investment because it was too heavily weighted in money market funds and wasn't designed to keep up with inflation." Stable value funds are usually comprised of a mix of short- and intermediate-term investments. The plaintiffs argue that Lockheed's Stable Value Fund was heavily weighted in short-term money market investments, which resulted in a low rate of return that did "not beat inflation by a sufficient margin to provide a meaningful retirement asset." The matter has been working its way through the court system since 2006 and includes related class action complaints regarding record-keeping fees charged by the plan. The Lockheed Martin Corporation Salaried Savings Plan currently has over 131,600 participants with some $19.8 billion in plan assets, according to BrightScope. The Stable Value Fund represents a 17% allocation of currently held assets, as reported by the retirement plan ratings service. "Plans with underperforming investments and high fees face the risk of large litigation recoveries and court directives about investments," says Buckman. "Plan sponsors and other fiduciaries who want to reduce their exposure should consider that the cost of retaining professional advisers to assist them in fulfilling their fiduciary responsibilities well are relatively small in comparison to the recoveries or settlements that could result from failing to meet ERISA standards."