We’ve been here before. Back when employers were freezing or terminating retiree medical care plans, affected employees were suing based on conflicts between plan documents and employee communication materials.
Now, it seems that there’s been a flurry of litigation involving conflicts between plan documents and Summary Plan Descriptions. Two blogging lawyers have picked up on this. Suzanne Wynn tells us in her Pension Protection Act Blog that When the Plan Document and the SPD Conflict, No Good Can Follow, and Brian King in his ERISA Law Blog writes about Revisiting Conflicts Between Plan Documents & SPDs.
Steve Rosenberg in his Boston ERISA Law Blog and I played ping-pong with this topic late last year – Steve writing about Summary Plan Descriptions and Grants of Discretion, and me writing Yes, but what does it mean?
We can expect more of these conflict situations to arise as the aging workforce retires and take distributions. So what’s the solution? Here’s a practical suggestion. Plan sponsors should consider having an experieced ERISA attorney review the plan documentation. In risk management terms, it’s "travel accident insurance". And for those plan sponsors who are fee adverse, then consider the old English adage, "penny-wise and pound-foolish."
Now about those employee handbooks….
Picture credit: Ken Camp.