The Tenth Circuit held that a pension plan consultant, who misstated the amount of monthly pension payments that a pension plan participant would receive in retirement, was not a fiduciary under ERISA.
Plaintiffs Trent and Wendy Lebahn, who were participants in the National Farmers Union Uniform Pension Plan, claimed that the Plan, its Pension Committee and consultant breached their fiduciary duties when the consultant told them that if Mr. Lebahn retired soon he would be entitled to $8,444.18 per month when in fact it turned out that this amount was overstated by nearly $5,000 per month. Because the overstated amount was paid for several months, the plan demanded that Mr. Lebahn return over $43,000 in overpayments.
The Tenth Circuit affirmed the dismissal of the complaint because the Lebahns failed to adequately allege that the consultant had fiduciary status. The Court, relying on the New Oxford American Dictionary, explained that “fiduciary status requires authority or responsibility that is discretionary, which entails ‘the freedom to decide what should be done in a particular situation’” and that conducting a routine computation, as required by one’s job, does not require discretion. The Court also relied on the Department of Labor’s regulations, 29 C.F.R. §§ 2509.75-8 and 2509.75-5, which explain that “a person who performs administrative functions, such as calculating benefits, does not automatically have discretionary authority.” Because the Court concluded that the consultant was not a plan fiduciary, it determined that it need not decide whether her fiduciary status could support liability of the other defendants.
The case is Lebahn v. Nat’l Farmers Union Unif. Pension Plan, et al., No. 15-3201, 2016 BL 221313 (10th Cir. July 11, 2016).