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Category Archives: Court Cases

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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

Defining Equitable Relief and Plan Terms

Posted in Court Cases, Plan Administration, Welfare Plans

While it may seem boring to those who don’t deal with benefit plans on a daily basis, the Supreme Court’s recent decision in US Airways, Inc. v. McCutchen is somewhat important.  The issues litigated in that case were whether two equitable defenses applied in the context of a health plan’s claim for reimbursement under ERISA Section 502(a)(3).  With it, comes … Continue Reading

When is a Spouse an Ex-Spouse? Beneficiary Designations and Your Plan

Posted in Court Cases, Plan Administration, Retirement Plans

In previous entries, I have written about what happens when you can’t locate a spouse for waiver purposes, about how to deal with missing beneficiaries or even how to review QDROs.  Well, every now and then a new case comes around that throws in a new twist, so let’s consider when a spouse really ceases … Continue Reading

Personal Exposure to Withdrawal Liability: Beware of “Business Activites”

Posted in Court Cases, Retirement Plans

In case you are completely overwhelmed with PPACA compliance issues, I decided to write about my other favorite topic: withdrawal liability.  When employers who contribute to a multiemployer defined benefit retirement plan cease to have a contribution obligation, they can be assessed withdrawal liability, which can be a very big number and can really come … Continue Reading

Breach of Fiduciary Duty Claims Don’t Automatically Create Individual Remedies

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

When the Supreme Court decides not to take a case, that is generally not news.  But in the case of the Court’s decision to decline a review of Walker v. Federal Express Corp., there should be some mention of its impact on claims under ERISA.  Usually, when I am defending a claim made against a … Continue Reading

Are You Part of a Control Group? It Counts When Counting

Posted in Court Cases, Plan Administration, Welfare Plans

Between COBRA, discrimination testing and determining PPACA compliance, employers really have to know who to count when counting employees.  Take, for example, the case of Warnecke v. Nitrocision LLC, where a district court held that an employer had more than 20 employees and was subject to COBRA because even though the direct employer had fewer … Continue Reading

Yikes! $83,000 COBRA Penalty For Not Providing Notice

Posted in Court Cases, Plan Administration, Welfare Plans

I cannot stress enough the importance of documenting plan procedures and following them for each stage of plan administration.  Nothing brings this home as much as a high-dollar award against an employer for failure to satisfy an administrative obligation.  Since it seems like COBRA creates these scenarios most often, let’s look at a recent decision … Continue Reading

Beware of “Springing” Fiduciary Status: Do You Control Plan Assets?

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

When I was in law school, I vaguely remember learning about "springing" interests.  They pop up when some event occurs that creates some claim to the property or trust.  Well, in some instances, fiduciary status can spring up based on whether you actually exercise discretion over plan assets.  In other words, you might not intend to … Continue Reading

Don’t Be Tempted to Be Flexible (At Least With Plan Terms)

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

Frequently I am asked about the possibility of giving "something extra" to employees because of a long work history or because of special circumstances and the employer wants to do something special for them.  Unfortunately, they sometimes look to the benefit plan and that might mean bending the benefit plan a little or giving some extra … Continue Reading