DOL Addresses Question About Providing Audio Recordings to ERISA Claimants

The requirement to produce requested documents and the definition of relevant documents addressed in a DOL information letter applies to retirement plans, an attorney tells PLANADVISER.


The Department of Labor (DOL) has responded to a request about whether Section 503 of the Employee Retirement Income Security Act (ERISA) and the department implementing a claims procedure regulation require a plan fiduciary to provide, upon a claimant’s request, a copy of an audio recording and transcript of a telephone conversation between the claimant and a representative of the plan’s insurer relating to an adverse benefit determination.

An information letter issued by the DOL says a claimant’s request for such a recording was denied. The denial stated that the “recordings are for ‘quality assurance purposes,’” and “are not created, maintained or relied upon for claim administration purposes, and therefore are not part of the administrative record.”

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

The DOL said ERISA Section 503 requires every employee benefit plan to “afford a reasonable opportunity to any participant whose claim for benefits has been denied for a full and fair review by the appropriate named fiduciary of the decision denying the claim.” Importantly, the regulations further require that the claims procedures of a plan will not provide a reasonable opportunity for a full and fair review of a denied claim, unless, among other things, “the claims procedures provide that a claimant shall be provided, upon request … copies of, all documents, records and other information relevant to the claimant’s claim for benefits.”

The DOL noted that, among other things, its regulation provides that for this purpose, a document, record or other information is relevant to a claimant’s claim if it was “generated in the course of making the benefit determination,” even if it was not “relied upon in making the benefit determination.” In addition, the DOL said, it is immaterial whether information was “not created, maintained or relied upon for claim administration purposes.”

In the DOL’s perspective, the fact that a recording was made for quality assurance purposes would support it being subject to a disclosure request for relevant “documents, records and other information.”

The DOL added that nothing in the regulation requires that relevant documents, records or other information consist only of paper or written materials. Rather, in the preamble to recent amendments to its regulations, the department recognized that an audio recording can be part of a claimant’s administrative record. The DOL previously clarified that no limit was intended on the types of evidence claimants can submit. In its response to commenters on the regulations, the department listed “video, audio or other electronic media” as types of evidence plans cannot refuse to accept.

Patrick DiCarlo, of counsel at Groom Law Group, Chartered, tells PLANADVISER that an information letter is less formal than a private letter ruling. “A private letter ruling is binding on the party that made the request,” he says. “This is not binding on anyone; it’s just providing information about the DOL’s perspective.”

DiCarlo says the claim regulation referenced in the information letter applies to both health and welfare plans and retirement plans. In other words, the requirement to produce requested documents and the definition of relevant documents is the same for both types of plans.

“Retirement plans would have the same concerns about whether call recordings would have to be produced if requested,” he adds. “If the situation moved to litigation and requested documents were not produced, there would be consequences for the plan sponsor.”

DiCarlo notes that the information letter is fairly limited in scope. “The initial reactions—some that I’ve heard—is this means all call recordings have to be disclosed to participants, but this is the DOL’s specific opinion on a particular set of circumstances,” he explains. “In many situations, there are calls participants want that occurred years before a claim was made, and this [information letter] doesn’t address that situation.”

Investment Product and Service Launches

Northern Trust announces latest digital document capture feature; Adaptive Investments partners with WealthShield to manage portfolios; and Equitable adds managed accounts and cash balance plan to solutions for small businesses.

Art by Jackson Epstein

Art by Jackson Epstein


Northern Trust Announces Latest Digital Document Capture Feature

Northern Trust has launched a machine learning-powered document capture capability as the foundation of a multi-year investment to digitize alternative asset servicing and enhance the experience for asset owner clients that invest in complex private market and unlisted assets.

Digital document capture enables Northern Trust to streamline historically manual workflows by automating the receipt and processing of alternative asset documents and fund manager reports on holdings and performance of hedge funds, private equity and other alternative assets. Northern Trust’s proprietary solution combines robotic process automation and cloud-based technology to provide transparency and data standardization that enables greater understanding of portfolio risk and performance. 

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

“As alternative asset classes continue to grow in importance to institutional investors, Northern Trust is committed to driving efficiency and reducing operational risk through the use of emerging technologies,” says Pete Cherecwich, president of corporate and institutional services at Northern Trust. “Digital document capture is a huge step forward, and only the start of our larger plan to enhance alternative asset servicing for the benefit of our clients.”

Automated document capture enables Northern Trust’s alternative asset servicing teams to focus on more strategic aspects of the process and reduces the need for manual intervention when coordinating saving, storage and categorization. Since alternative assets are often valued on only a monthly or quarterly basis, asset owners can also benefit from faster servicing of their assets and deeper data insight provided through artificial intelligence (AI). 

Adaptive Investments Partners with WealthShied to Manage Portfolios 

Adaptive Investments and WealthShield  have entered into agreement to manage and deliver SMART Portfolios and RISKHedge Portfolios in a collaborative effort. 

SMART Portfolios optimize strategic, opportunistic and tactical segments into a single portfolio deliverable.  SMART Portfolios are offered in five risk models, from conservative to aggressive, comprised of both ETFs and Mutual Funds.

RISKHedge Portfolios are tactical and designed to be added as a sleeve to a traditional portfolio.  The RISKHedge Portfolio is similar to the tactical segment of a SMART Portfolio.  RISKHedge Portfolios are also offered in five risk models, from conservative to aggressive, comprised of both ETFs and Mutual Funds.

“SMART Portfolios have delivered solid performance since their inception, roughly seven years ago,” says Gregory Rutherford, president & CEO of Adaptive Investments. “The SMART Portfolio unique structure, aligns with client expectations, providing benchmark like returns in up markets while mitigating risk in down markets. We focus efforts to consistently improve our portfolio solution.  We are excited and confidant that we can enhance portfolio risk adjusted returns, by incorporating Wealth Shield’s proprietary Market Valuation Framework (MVF).  And, we welcome the addition of WealthShield’s tremendous team of highly accredited investment professionals to the process”. 

“We are excited to join the Adaptive Investments team and help strengthen the SMART Portfolio and RISKHedge investment process,” adds Clint Sorenson, co-founder, WealthShield. “We have tremendous respect for what Adaptive has built and the unique portfolio design that has helped deliver some of the best portfolio returns in the marketplace.   By combining efforts, we are convinced that SMART Portfolios and RISKHedge Portfolios will continue to offer Financial Advisors, best in class, and differentiated portfolio solutions, for delivery to their clients.”

Equitable Adds Managed Accounts and Cash Balance Plan to Solutions for Small Businesses

Equitable has announced the addition of customized managed accounts and a cash balance plan to its group retirement plans for small to medium-sized businesses.

The firm notes that managed accounts provide an option for people looking for guidance in creating retirement plan allocations, with a customized portfolio for each plan participant based on their current age, location, contribution rate, marital status, gender and balance. Managed accounts can be further personalized by the participant online. This customization can be beneficial to helping retirement savers achieve their goals.

The new managed accounts will be provided through Stadion Money Management, an investment management firm and a 3(38) fiduciary. There are no minimum account balances for either plans or their participants.

“Extending increased customization and personalization in their 401(k) plans, along with advice and a full suite of employee benefits solutions is important to helping small business owners and their employees weather uncertainty and plan for their financial futures,” says Jessica Baehr, head of group retirement at Equitable.

«