By Jane Meacham
Employers and plan administrators may want to err on the side of providing more information, not less. That is one of the messages behind a recent decision by the U.S. District Court for the Northern District of Ohio, Western Division. In Arp v. Whirlpool Corp., Case No. 3:12 CV 770 (July 10, 2012), Whirlpool Corp. failed in its attempt to secure dismissal of a suit brought by 31 of its former union employees who alleged the company failed to give them information about their credited service in Whirlpool’s pension plan.
The company maintained “nothing in ERISA required the plan administrator to provide plaintiffs with details about their individual service calculations,” but Judge Jack Zouhary disagreed. His decision supports a broad reading of ERISA disclosure provisions by employers and plan sponsors.
The employees worked for Whirlpool at a factory in Bellevue, Ohio, that was scheduled to close. They made at least five inquiries requesting information from the company that would allow them to determine whether their pension benefits had been calculated properly. Specifically, the plaintiffs asked for “a breakdown of hours awarded for each year and an explanation of why years that were credited less than one were not credited as full years.”
Whirlpool argued that there is no statutory obligation to provide the requested information, as it is specific to individual plan participants. It claimed that the requested records do not relate to benefits due. The district court denied Whirlpool’s request for dismissal of this count. Whirlpool noted that legal precedent has defined the documents a plan administrator must furnish as “properly limited to those class of documents which provide a plan participant with information concerning how the plan is operated,” and they do not include “documents used in the ministerial day-to-day processing of individual claims.”
The district court judge disagreed with the company on this point, saying Whirlpool’s interpretation of ERISA disclosure requirements was too narrow. He ruled that the law requires sufficient information be made available to support individual participants’ retirement calculations under ERISA. The judge cited a decision by the 6th U.S. Circuit Court of Appeals stating that Congress intended ERISA disclosure provisions to “guarantee that plan participants have access to information they need to protect their interests in the assets and funds being managed by the plan fiduciaries.”
Read the whole story at HR ComplianceXpert.com.
For more information about penalties for failure to disclose information that must be made available to participants, see Tab 850 in Thompson Publishing Group’s Pension Plan Fix-It Handbook.