March 2025 ERISA Update

After issuing a flurry of guidance in January and February regarding various SECURE 2.0 provisions, neither the Internal Revenue Service nor the U.S. Department of Labor issued any retirement plans guidance since last month’s edition of this newsletter was published.  Thus, this month’s edition focuses solely on recent ERISA litigation.

Given the continuing wave of ERISA litigation, this article has become a mainstay of The Speed Reader. A sample of recent cases is provided below. 

The most common type of ERISA case involves retirement plan participants’ allegations that plan fiduciaries caused participants to pay excessive recordkeeping and investment fees and included one or more poorly-performing investment options in the plan. A recent case in this category includes the following:

• Rudasill v. Swiss Re American Holding Corporation (complaint filed on February 19 in the U.S. District Court for the Southern District of New York)  

Other types of recent ERISA cases are as follows:

Jones v. AT&T, Inc.  (decided on March 6 by the U.S. Court of Appeals for the Fifth Circuit):  This case involves ERISA penalties that can apply to a plan administrator for failing to produce required plan documents upon a participant’s request. Although the plan at issue in this case was a welfare benefit plan, those provisions apply to ERISA-covered retirement plans as well. 

The plaintiff was the executor of his mother’s estate, and his mother was a participant in the defendant’s welfare benefit plan. As a result of the participant suffering severe injuries in a car accident, for which another party was found liable, the defendant paid her over $400,000 in accident-related medical benefits. The defendant subsequently filed a lawsuit, seeking a constructive trust or equitable lien over her settlement proceeds with the liable party (the “Reimbursement Litigation”).

In connection with the Reimbursement Litigation, the plaintiff sent a document request to the defendant. The request sought ERISA plan documents regarding the plan’s health benefits and the payments made to his mother under the plan as a result of the accident. In response, the defendant produced over 12,000 pages of information, along with a description of the documents. The plaintiff and the defendant subsequently resolved the Reimbursement Litigation. Three months later, however, the plaintiff filed this lawsuit, seeking discretionary penalties under ERISA for the defendant’s alleged failure to produce required documents.

The court began its analysis by citing the applicable ERISA provisions, which are as follows:

• A plan “administrator shall, upon written request of any participant or beneficiary, furnish a copy of the latest updated summary, plan description, and the latest annual report, any terminal report, the bargaining agreement, trust agreement, contract, or other instruments under which the plan is established or operated.”
• “Any administrator…who fails or refuses to comply with a request for any information which such administrator is required…to furnish to a participant or beneficiary…may in the court’s discretion be personally liable to such participant or beneficiary in the amount of up to $100 a day from the date of such failure or refusal, and the court may in its discretion order such other relief as it deems proper.”

The appeals court then agreed with the trial court that the plaintiff was “in possession of the relevant documents pertaining to [his mother’s] benefit plan,” which made his attempt to gather additional documents from the defendant “a fishing expedition.” As support for that conclusion, the appeals court noted:

• In preparing the documents’ production, the defendants did not act with the intent to exclude or withhold any relevant documents from the plaintiff.
• The defendants exercised reasonable care to ensure that all responsive documents were provided to the plaintiff.
• The plaintiff was not prejudiced as a result of the defendant’s alleged failure to include any particular document in the document production.

Therefore, the appeals court ruled that the plaintiff is not entitled to recover penalties under ERISA. The case serves as a reminder, however, that it is important for plan administrators to provide plaintiffs (and beneficiaries entitled to benefits) with all relevant documents upon their request, pursuant to the ERISA provisions referenced above.

Miller v. Campbell Soup Company Retirement & Pension Plan Administrative Committee (ruling issued on February 6 by the U.S. Court of Appeals for the Third Circuit):  The plaintiff in this case worked for the Campbell Soup Company for almost 30 years, with a brief break in service in 2001. Before her break in service, she accrued benefits under a traditional defined benefit pension formula. After her break in service, she accrued benefits under a cash balance formula. She retired in 2015 and, in return for a severance package and medical coverage, signed a release of claims against the defendant (the “Release”).

The plaintiff argued that she was entitled to several more years of benefits under the traditional defined benefit pension formula and that the defendant breached its fiduciary duty when it allegedly misrepresented what her retirement benefits would be. In addition, she contended that such claim was not barred by the Release. In this connection, she argued that the Release did not cover claims arising after she executed it, and her claim did not accrue until she discovered the alleged misrepresentations in 2017.

The court disagreed, however, relying on the Release’s terms. In particular, the Release provided that:

• Claims of misrepresentation were barred.
• By signing the Release, the plaintiff relinquished “any and all claims that you have or may have.” The court then noted that in other cases, it interpreted similar “may have” language as releasing claims that the parties had but may discover later.