Compliance November 18, 2010

Widow Loses SERP Benefits Bid

The widow of a participant in Diebold Inc.'s supplemental executive retirement plan (SERP) did not meet the plan’s definition of “spouse,” so she was not entitled to her late husband’s benefits, a federal judge ruled.
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In rebuffing Michele B. Parr’s claims that she should be awarded the benefits accrued by her late husband, Harry Parr, Chief U.S. District Judge Solomon Oliver Jr. of the U.S. District Court for the Northern District of Ohio ruled that the plan’s “spouse” definition controls over the comparable language in the summary plan description (SPD).

According to Oliver, 6th U.S. Circuit Court of Appeals case law on the subject holds that when a participant receives only a copy of the SPD, that language controls when it conflicts with plan language. However, there must be more than “inconsistency” for the SPD language to control, and ambiguous SPD language does not trump unambiguous plan language, Oliver explained.

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The ruling said the Diebold SERP defined “spouse” as the participant’s surviving spouse at the time of the participant’s death provided that they were married at least one year prior to the earlier of the participant’s death or date of retirement. Meanwhile, under the SPD, a participant and his or her spouse must have been married throughout the one-year period before the participant’s death for the spouse to qualify for benefits. The widow in this case was married to the participant when he died, but not when he retired.

In ruling that the plan’s clear language should determine the outcome of Michele Parr’s claims, Oliver said that while the omission in the SPD of the “earlier of” language may produce misrepresentations, it did not alter the plan’s terms. The court further ruled that the plan administrator did not act arbitrarily and capriciously when it determined that the widow did not fall under the SERP’s definition of “spouse.”

“The definition of ‘spouse’ contained in the SERP, on a plain reading, does not apply to Plaintiff. She was not married to Mr. Parr at the time of his retirement and is therefore not entitled to the death benefits as a spouse under the terms of the plan,” Oliver declared in the ruling.

Even if the SPD language did create a conflict, the administrator’s decision had to be deferred to because it was rational in light of the plan language, Oliver contended.

The case is Parr v. Diebold Inc., N.D. Ohio, No. 5:09 CV 1041.

Diversions November 18, 2010

Add “Great Distance Between Fingers!” to Sales Pitch

The length between the second and fourth finger on a man is an indicator of high levels of prenatal testosterone, which may lead to higher levels of risk-taking and potential financial success. 
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A team of researchers at Concordia University analyzed risk-taking among 413 male and female students.  The findings were published in Personality and Individual Differences journal.   

“Prenatal testosterone exposure not only influences fetal brain development,” said study co-author and graduate student, Zack Mendenhall, “but it also slows the growth of the index finger relative to the sum of the four fingers excluding the thumb.”

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The study compared the length of the index finger with all four digits (known as the rel2 ratio) and found that those with lower ratios were more likely to engage in risk-taking. These findings were further confirmed by the additional measurement of the ratio between the index and ring finger. These correlations were only observed in men.

“A possible explanation for the null effects in women is that they do not engage in risky behaviour as a mating signal, whereas men do,” said Professor Gad Saad, Concordia University Research Chair in Evolutionary Behavioral Sciences and Darwinian Consumption.   

“Since women tend to be attracted to men who are fit, assertive and rich, men are apt to take risks with sports, people and money to be attractive to potential mates. What’s interesting is that this tendency is influenced by testosterone exposure – more testosterone in the womb can lead to more risks in the rink, the bar and the trading floor in later in life,” says first author and Concordia doctoral student, Eric Stenstrom.

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