Compliance March 19, 2012

Employer Wins Case Regarding Mistaken SPD Information

Former Northrop Grumman employees failed to prove that the company intended to mislead employees with a contradiction from plan terms in its summary plan description (SPD).
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In addition, the plaintiffs conceded that they did not rely on any of the misleading information in the SPD when deciding whether to retire, the 9th U.S. Circuit Court of Appeals found.   

The appellate court had previously sent the case back to a federal district court after finding the ambiguity between the SPD and the plan document being enforced by plan administrators created a triable issue. The district court again granted summary judgment for Northrop Grumman (see “Participants not Due Additional Benefits Based on Defective SPD”).    

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On appeal, the 9th Circuit noted that the Supreme Court’s resolution of CIGNA Corp. v. Amara in 2011 overruled, in relevant parts, its two prior decisions that had treated SPD language as if it were an enforceable part of the retirement plan. In holding that the SPD  language  was  not  part  of  the  plan,  the  high court  made  it clear  that  “summary  documents,  important  as  they  are,  provide communication  with  beneficiaries  about  the  plan,  but that their statements do not themselves constitute the terms of the plan for purposes of the Employee Retirement Income Security Act (ERISA) § 502(a)(1)(B), the 9th Circuit pointed out in its opinion.  

The appellate court concluded that the committee may  have  a  duty  to  enforce  the  terms  of  the  plan, but the terms of an SPD are not the terms of the plan.  

The opinion is available at http://www.ca9.uscourts.gov/datastore/opinions/2012/03/16/10-55161.pdf.

Deals & People March 16, 2012

CRIC Hires Director of Communications

Castle Rock Investment Company (CRIC) added Kristen Sanchez as director of communications.
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In her new role, Sanchez will develop and implement a strategy to effectively communicate the firm’s ability to help plan sponsors reduce their liability while optimizing their plans. In addition, she is responsible for participant‐directed communications that are designed to educate and motivate employees to take the right steps to enhance their retirement readiness.

Sanchez brings more than 14 years of experience in marketing and communications to Castle Rock Investment Company. She has worked as a marketing consultant in numerous industries, including the nonprofit, real estate, government, technology and hospitality sectors.

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In addition to her new role, Sanchez serves as a volunteer for numerous nonprofit organizations, including the Board of Trustees for the Colorado‐based Christian Foundation. She is also a member of the Douglas County School Accountability Committee. She holds a Bachelor of Science in business administration from the University of Colorado at Boulder and a master’s in marketing from the University of Colorado at Denver.

 

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