Archives: Pension Benefits

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Sixth Circuit Explains Why SPD is Still Important After Amara

In 2011, the Supreme Court clearly held that a summary plan description cannot trump the terms of an ERISA plan, overturning the rule in many circuits. Instead, the Amara rule provides that the plan itself governs over a summary of the plan when the two conflict. This does not mean that an SPD is meaningless. … Continue Reading

Revenue Sharing in 401(k) Plans is OK, According to the Seventh Circuit

Revenue sharing is an arrangement under which a mutual fund in which pension assets are invested pays a portion of its fees to the entity that services the pension plan. In Leimkuehler v. American United Life Ins. Co., 713 F.3d 905 (7th Cir. 2013), the Seventh Circuit held that the arrangement did not violate ERISA … Continue Reading

Fiduciary Duties and Investment Bubbles

It is well-established that and ERISA pension plan administrator has a fiduciary duty to invest plan assets prudently. This duty is called, unimaginatively, the “prudent-man rule” – or perhaps the gender-neutral “prudent-person rule.” This rule, which existed long before ERISA was enacted, is enshrined in the text of the statute, which requires fiduciaries to use … Continue Reading

Everything You Never Wanted to Know About Backloading

ERISA does not require employers to establish retirement plans for its employees, and it does not require employers to pay particular benefits if they choose to establish a plan. ERISA does, however, impose some restrictions on employers who choose to provide a retirement benefit. One of those requirements concerns backloading, which is a concept only … Continue Reading

Social Security Statute Aids Interpretation of Ambiguous Plan Offset Provision

In Lipker v. AK Steel Corp., 2012 WL 5346325 (6th Cir. Oct. 31, 2012), the plaintiff applied for surviving spouse benefits under the pension benefits plan administered by her husband’s former employer. The administrator approved her claim, but she disputed the amount of the benefit. The discrepancy between her expectation and the actual award hinged … Continue Reading

ERISA Preemption Quiz

Here’s a quiz to test your preemption mojo. Scenario 1: Employee transfers to an affiliate of employer, intending to return in the future. Employer orally agrees that it will maintain the benefits of its retirement plan for employee as if he was still an employee. Employee never returns, and later sues employer for the promised … Continue Reading

Using Congressional Policy – Part 2 – What Policies Did Congress Have?

In the 1950s, Congress began studying welfare and pension funds covered by collective bargaining agreements. After years of hearings, it concluded its studies and investigations with the following: The most serious single weakness in this private social insurance complex is … the too frequent practice of withholding from those most directly affected, the employee-beneficiaries, information … Continue Reading