Equitable Remedies

The U.S. Court of Appeals for the Sixth Circuit recently affirmed the crucial importance of accurate plan summaries in the post-Amara world. To date, part of the legacy of CIGNA v. Amara has been an uptick of cases in which ERISA plaintiffs allege a material mismatch between a plan document and a summary plan description (“SPD”). Plaintiffs petition the court to use the broad equitable remedies available under ERISA § 502(a)(3) after Amara to reform the plan document to reflect the interpretation the plaintiff favors—even if the plan’s terms on the subject were crystal clear.
Continue Reading Reformation Claim May Proceed Despite Clear Plan Terms, Sixth Circuit Holds

What happens when a plan participant seeks benefits that he or she claims are set forth in a summary plan description (“SPD”) but are found nowhere in the plan itself?  On one level, the Supreme Court in Cigna Corp v. Amara answered this question decisively:  SPDs and other written disclosures about the plan do not constitute terms of the plan and cannot modify the plan’s terms.  Accordingly, participants cannot claim under ERISA Section 502(a)(1)(B) that they are entitled to benefits under the plan based on statements that appear only in the SPD.

However, the Supreme Court also stated that a participant could obtain “appropriate equitable relief” under ERISA Section 502(a)(3) for statutory disclosure violations.  The Supreme Court identified three possible equitable remedies:  reformation, estoppel, and surcharge.  Although the Supreme Court made clear that the traditional requirements in equity for obtaining any such relief must be satisfied, it left to the district court the task of determining when such remedies are appropriate.
Continue Reading Amara Decision Affirms Broad Equitable Remedy for Inaccurate SPD

In an amicus brief filed last week, the ERISA Industry Committee and Chamber of Commerce of the United States of America stated that a court should not rewrite a plan document, or penalize the administrator who follows the plan document, merely because a summary plan description does not disclose wear-away in pension accruals (although it