Employee Benefits & Executive Compensation Blog

The View from Proskauer on Developments in the World of Employee Benefits, Executive Compensation & ERISA Litigation

Aaron Feuer

Aaron Feuer

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Plan Administrator’s “Second Plan Interpretation” Violates Anti-Cutback Rule

The Third Circuit held that a plan administrator’s plan interpretation requiring an actuarial reduction of certain employees’ pension benefits conflicted with the plan’s terms.  As such, its decision to reduce participants’ benefits violated ERISA section 502(a)(1)(B), and also violated ERISA’s prohibition against cutbacks of accrued benefits. … Continue Reading

District Court Defines Surcharge Broadly

A New York district court held that surcharge could include not only make-whole relief, but also consequential, exemplary, or punitive damages in limited circumstances where malice or fraud is involved.  Plaintiff Janet D’Iorio alleged that Winebow breached its fiduciary duty by failing to provide an SPD and by making material misrepresentations about whether her commissions … Continue Reading

Ninth Circuit Breathes Life Into Participant’s Claim for Surcharge

A panel of the Ninth Circuit withdrew its earlier opinion and has now joined other circuits in finding that the equitable remedy of surcharge is available for participants seeking recovery of personal losses as opposed to losses suffered by the plan.  Gabriel v. Alaska Elec. Pension Fund, 2014 WL 7139686 (9th Cir. Dec. 16, 2014).  … Continue Reading

Second Circuit Holds ERISA Disclosure Claims Are Time-Barred

The Second Circuit recently held (in a summary order) that plan participants’ claims alleging violations of ERISA’s disclosure rules in connection with a cash balance conversion were barred by the statute of limitations.  In so ruling, the Court explained that because the participants’ claims that defendants breached their fiduciary duties by mischaracterizing the new plan’s … Continue Reading

Second Circuit Rejects Plan’s Claim For Reimbursement From Another Plan

Where an ERISA plan specifically sets forth in the plan document its rights to reimbursement/subrogation vis-à-vis a plan participant then there is no requirement that recovery be conditioned on the plan being able to trace the recovered monies to the original benefit payment.  Under such circumstances, the plan is considered to have an equitable lien … Continue Reading

District Courts Continue to Reject the Ninth Circuit’s Limitation on Surcharge

We previously reported (here) that the Ninth Circuit stands alone in expressly limiting the availability of surcharge to cases involving loss to, or unjust enrichment at the expense of, the plan (as opposed to being available to a participant claiming personal loss flowing from a fiduciary breach).   See Gabriel v. Alaska Electrical Pension Fund, … Continue Reading

View From Proskauer: The Availability of Surcharge as Relief for Individual ERISA Fiduciary Breach Claims

Three years ago, the U.S. Supreme Court identified three forms of appropriate equitable relief — reformation, equitable estoppel and surcharge — that are available under Section 502(a)(3) of the Employee Retirement Income Security Act (‘‘ERISA’’). See Cigna Corp. v. Amara, 131 S. Ct. 1866, 50 EBC 2569, 2011 BL 128629 (2011). This article focuses on the availability of surcharge and, in particular, … Continue Reading

Sixth Circuit says ERISA does not preempt state law claim for fraudulent inducement.

The Sixth Circuit recently held that ERISA did not preempt  a plan participant’s claim for state law fraudulent inducement.   McCarthy v. Ameritech Pub., Inc., No. 12-4510, 2014 WL 3930572 (6th Cir. 2014).  Defendant-API’s decided to terminate Plaintiff’s employment and gave her two options: (1) she could leave and receive a lump-sum “termination payment”;  or (2) … Continue Reading

Unpaid Employer Contributions as Plan Assets: Expansion Of Liability Under ERISA

The Employee Retirement Income Security Act of 1974, as amended (“ERISA”), requires trustees of multiemployer pension and benefit funds to collect contributions required to be made by contributing employers under their collective bargaining agreements (“CBAs”) with the labor union sponsoring the plans. This is not always an easy task—often, an employer is an incorporated entity … Continue Reading

District Court in Tenth Circuit Adopts Presumption of Prudence

A district court in the Tenth Circuit adopted the presumption of prudence in dismissing a class action alleging that the defendants violated their fiduciary duties by allowing participants to continue investing in company stock at a time when the employer was allegedly experiencing significant financial difficulties. In re Chesapeake Energy Corp. 2012 ERISA Class Litig., … Continue Reading

Ninth Circuit Allows Bankruptcy Discharge of ERISA Withdrawal Liability

The Ninth Circuit recently held that an employer who failed to pay $170,045 in withdrawal liability could discharge the liability in bankruptcy. Carpenters Pension Trust Fund v. Moxley, No. 11-16133 (9th Cir. August 20, 2013). In so ruling, the Court rejected the Fund’s argument that unpaid withdrawal liability constituted a plan asset. The Court distinguished … Continue Reading

Chiropractors Lack Standing Under ERISA to Assert Claims For Benefits

A federal district court in New Jersey recently dismissed claims asserted by a putative class of chiropractors seeking to enjoin the procedure used by UnitedHealth to determine the necessity of certain treatments administered by in-network physicians, finding that they lacked standing to assert their claims.  Premier Health Ctr., P.C. v. UnitedHealth Grp., No. 2:11-cv-00425-ES-CLW (D.N.J. … Continue Reading

Equitable Exception To Excuse Interim Withdrawal Liability Payments Rejected

A federal district court in New Jersey recently declined to apply an equitable exception to excuse an employer’s failure to pay interim withdrawal liability payments while it challenged the demand for withdrawal liability. Nat’l Integrated Grp. Pension Plan v. Black Millwork Co., 2:11-cv-05072-KM-MAH (D.N.J. August 1, 2013). After making one withdrawal liability payment, the employer … Continue Reading

View from Proskauer: The Supreme Court To Opine On The Use Of Contractual Limitation Periods in ERISA Plans

Last year, we reported on how the federal discovery rule – pursuant to which claims for benefits do not accrue until the participant could reasonably have discovered the claim – can require plans to defend the merits of dated claims. In that article, we noted that efforts to protect plans had taken the form of … Continue Reading
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