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Category Archives: Court Cases

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Withdrawn Employers Don’t Have Standing: Why Employers Can’t Sue Trustees

Posted in Court Cases, Retirement Plans, Withdrawal Liability

For employers who cease to contribute to a multiemployer defined benefit pension plan, withdrawal liability is becoming more and more common.  When a pension fund is underfunded, the cessation of the contribution obligation can trigger the obligation to pay off the allocated portion of that unfunded liability which can be substantial.  When I am working … Continue Reading

COBRA Notice Penalties: Employer Pays Even Though They Also Paid Bills

Posted in Court Cases, Plan Administration, Welfare Plans

The issue of COBRA notices and penalties can create problems when considering who is entitled to the notice and when they have to be issued.  When claims are brought for alleged violations of the provision of COBRA notices, some employers assume that they can just avoid penalties if there are not actual damages, say for … Continue Reading

Subsidies in the Federal Marketplace: A Definite Maybe

Posted in Court Cases, Plan Administration, Welfare Plans

Amidst all of the other issues surrounding implementation of the ACA, there is an underlying issue about whether or not subsidies (in the form of tax credits) are available for individuals who obtain coverage through the federal exchange marketplace as opposed to the state exchanges.  Many states have determined not to offer exchanges, which means … Continue Reading

Disclosures with Respect to Preventative Care: DOL Notice Requirement post-Hobby Lobby

Posted in Court Cases, Plan Administration, Welfare Plans

It seems like one of the hardest parts of ACA compliance is waiting for guidance on specific issues.  However, after the decision in Hobby Lobby, the DOL promptly issued FAQ Part XX that addresses the notice requirements for employers who cease providing contraceptive services.  The FAQ has a single question and is reprinted below in … Continue Reading

“Hobby Lobby” Decision Cuts Unique Exemption into Affordable Care Act’s Contraceptive Coverage Requirement

Posted in Court Cases, Plan Administration, Welfare Plans

On June 30, 2014, in a 5-4 decision, the U.S. Supreme Court ruled in Burwell v. Hobby Lobby Stores, Inc. (“Hobby Lobby”) that closely held for-profit companies that formed their companies for a religious purpose can qualify for an exemption from the Patient Protection and Affordable Care Act (“ACA”) requirement to pay for certain contraceptive … Continue Reading

Moench On This – U.S. Supreme Court’s Decision in Fifth Third Bancorp v. Dudenhoeffer for ESOP Fiduciaries

Posted in Court Cases, Plan Administration, Retirement Plans

On June 25, 2014, in a unanimous decision, the U.S. Supreme Court in Fifth Third Bancorp v. Dudenhoeffer, held that fiduciaries of employee stock ownership plans (ESOPs) are not protected by a presumption that they have acted prudently in making investment decisions—a presumption commonly referred to as the “presumption of prudence” or the “Moench presumption.” … Continue Reading

U.S. Supreme Court Rules Inherited IRAs Are Not Retirement Funds

Posted in Court Cases, Retirement Plans

Susan Jordan, a benefits and wealth planning partner with the firm, wrote this article about a recent Supreme Court decision.  It is significant to consider when coordinating retirement planning and potentially impacts retirement plan administration.  For more information, please contact her directly. On June 12, 2014, the United States Supreme Court ruled that funds held … Continue Reading

A Surcharge is Not a Contribution (or at least not for Withdrawal Liability)

Posted in Court Cases, Retirement Plans

When calculating withdrawal liability payments, a multiemployer pension fund uses the “highest contribution rate” that the employer was obligated to contribute to the pension fund prior to the withdrawal.  Thanks to the Pension Protection Act, funds that are in critical status can impose a surcharge (up to 10%) and, in recent years, most funds included … Continue Reading

New Post-Windsor Guidance on Same-Sex Marriage

Posted in Court Cases, Plan Administration, Retirement Plans, Welfare Plans

Susan Jordan, one of my partners in Pittsburgh, provides the following guidance with respect to the IRS’ recent guidance on treatment of same-sex marriage: In its decision in United States v. Windsor, handed down on June 26, 2013, the United States Supreme Court declared Section 3 of the Defense of Marriage Act to be unconstitutional. … Continue Reading

Disclaimers Can Be A Good Thing, Particularly in Benefit Notices

Posted in Court Cases, Plan Administration, Retirement Plans

With the requirement that retirement plan administrators provide statements to retirees of account balances and benefit levels on a regular basis, the concept of including a disclaimer on the notices can be overlooked.  Most administrators and reluctant to state that the benefits may be subject to change in the future.  Particularly in the defined benefit … Continue Reading

Don’t Get Cute When Documents Are Requested: ERISA Penalty Provisions for “Hiding” Plan Documents

Posted in Court Cases, Plan Administration, Retirement Plans, Welfare Plans

ERISA generally requires that plan participants get copies of summary plan descriptions, plan documents and annual reports when requested. ERISA Section 104(b)(4) provides that “the administrator shall, upon written request of any participant or beneficiary, furnish a copy of the latest updated summary, plan description, and the latest annual report, any terminal report, the bargaining … Continue Reading

Funding Status Does Not Preclude Withdrawal: Remember Honerkamp

Posted in Court Cases, Plan Administration, Retirement Plans

More and more employers are looking to withdraw from multiemployer pension funds.  Employers cannot unilaterally withdraw from the fund as the obligation to contribute is established through collective bargaining with the union.  Lately, several employers have contacted me about representations from the union (or the fund) that claim that employers cannot legally withdraw from the … Continue Reading

Be Careful About Appeals: Deny them Completely the First Time

Posted in Court Cases, Plan Administration, Retirement Plans, Welfare Plans

Appeals for denial of benefits can create a real quagmire for plan administrators.  The appeal process creates an administrative record, and sometimes the administrative record is not complete.  It is important for plan administrators to consider each appeal completely, and address all issues related to claims processing, even ones not necessarily raised by the participant, … Continue Reading

Be Careful About Paying Claims: Health Plan Denied Reimbursement for Mistakenly Paid Claim

Posted in Court Cases, Plan Administration, Welfare Plans

Previously I had written about instances where a retirement plan was able to recoup overpayments from a pensioner when the payments were made as a result of a mistaken calculation.  As I said then, plan administrators should be wary about relying on ERISA as a guarantee that they could recoup overpayments.  Sure enough, the 7th … Continue Reading

Fiduciaries Can Sometimes Rely on Legal Advice (or Why ERISA Counsel is a Good Thing to Have)

Posted in Court Cases, Plan Administration, Retirement Plans, Welfare Plans

One of the hallmarks of the fiduciary obligation is to make decisions on an informed basis and to be reasonably diligent when making decisions related to the plan and its administration.  Fiduciaries can reasonably relay on experts, like plan counsel, when making decisions related to plan administration.  In Clark v. Feder Semo and Bard, P.C., … Continue Reading

No Windfalls Under ERISA: Court Approves $725,000 Pension Plan Reimbursement Claim

Posted in Court Cases, Plan Administration, Retirement Plans

Often time it happens that a pension plan participant is paid more from a pension plan than they should be getting.  Sometimes this administrative error can be as a result of mistakes regarding hire dates, termination dates or years of service.  Sometimes they can be a result of mistakes over reported wages to the plan … Continue Reading

The Plan Says What it Says: Plan Statute of Limitations Applies

Posted in Court Cases, Plan Administration, Retirement Plans, Welfare Plans

For the purposes of figuring out when a claim has to be brought, plans can, in some instances, dictate when the “statute of limitations” runs for bringing a lawsuit.  Part of this is for consistent administration and part of it may be to avoid untimely litigation.  This was the issue in the Supreme Court’s recent decision … Continue Reading

Sixth Circuit Punishes Insurer: Not Just Benefits Due But Profits As Well

Posted in Court Cases, Plan Administration

In the ongoing effort to determine what constitutes appropriate remedies under ERISA, the Sixth Circuit Court of Appeals has gone further than any court before it, by affirming a judgment directing a disability insurer to pay not just benefits due, but also and additional amount representing disgorgement of profits it allegedly made on the benefits.  … Continue Reading

IRS Updates Same-Sex Guidance on Tax Issues: Accounting for Excess Withholding

Posted in Court Cases, Plan Administration, Welfare Plans

In an ongoing effort to address question about how to treat the taxation of employee benefits for same-sex couple post-Windsor, the IRS has updated its FAQs for married same-sex couples with a couple of new questions and answers that further clarify how employers administer their plans.  Both relate to the right to seek a refund … Continue Reading

Withdrawal Liability Can Be Discharged in Bankruptcy: Good Thing to Know

Posted in Court Cases, Retirement Plans

Personal liability for company owners in a withdrawal liability scenario can be a scary thing.  Some recent federal decisions have held that, where an employer owes delinquent contributions, a business owner or manager who elects to pay other bills and not the fund can be held personally liable as a “fiduciary” provided the fund documents … Continue Reading

Control Group Concerns: Withdrawal Liability Applied to Investment Fund

Posted in Court Cases, Retirement Plans

Venture capital and private equity investing in employers can create a variety of problems.  In the withdrawal liability arena, control group considerations have typically been overlooked.  But a recent decision from the First Circuit Court of Appeals should create a new level of due diligence when considering investing in a company with pension liability.  This is because … Continue Reading

The Landscape After Windsor: Benefit Considerations for Same-Sex Couples

Posted in Court Cases, Plan Administration, Retirement Plans, Welfare Plans

Since the Supreme Court’s decision in Windsor, employers are faced with a variety of interesting questions about providing benefits to same-sex spouses.  Most of them have been related to the taxation issues about imputing income for benefits to same-sex spouses, which will have to be answered by specific guidance.  But while we wait for those … Continue Reading

Down Goes DOMA! Supreme Court Rules the Defense of Marriage Act Unconstitutional

Posted in Court Cases, Plan Administration, Retirement Plans, Welfare Plans

 Today the Supreme Court ruled that the federal Defense of Marriage Act is unconstitutional.  How this will ultimately play out remains to be seen, but from a benefit plan perspective, it is important to consider some initial concerns. From a benefit perspective, the DOMA basically required that the term “spouse,” when used in the Code … Continue Reading

Drunk Driving Death is an “Accident”: The Importance of Accurate Plan Language

Posted in Court Cases, Plan Administration, Welfare Plans

When is an accident not an accident?  In the employee benefits world, what constitutes an accident is defined by the terms of the plan.  Last month, the 4th Circuit Court of Appeals drove this home very clearly in a case called Johnson v. Am. United Life Inc. Co., where the Court found that a death … Continue Reading