Headlines about "Death benefits, incl. life insurance"
Gathered from the web by the editors at BenefitsLink.com.
[Guidance Overview] Plan Language Sufficient to Authorize Settlement of ERISA Benefit Claims with TCA's
Excerpt: "The recent decision in Faber & Young v. Metro. Life Ins. Co. highlights the boundary between conduct authorized under the plan on the one hand, and conduct forbidden by the fiduciary prohibitions of ERISA. The district court, influenced by the Second Circuit's opinion in Kendall v. Employees Retirement Plan of Avon Prods., 561 F.3d 112, 118 (2d Cir. 2009), held that the fiduciary's conduct did not cross the line drawn by ERISA's fidiciary constraints." (Roy Harmon III via Health Plan Law)
[Guidance Overview] In Pennsylvania, New Killed-in-Service Benefit Requires Immediate Action
Excerpt: "Providing what could be significant relief for many municipal police pension plans, Governor Edward G. Rendell signed Act 51 of 2009 into law on October 9, 2009. Effective immediately, Act 51 provides for a killed-in-service benefit to be funded by the Commonwealth of Pennsylvania equal to the monthly salary of the deceased officer, adjusted annually for the cost of living. The benefit is payable to the deceased's surviving spouse or, if there is no surviving spouse, to the deceased's minor children under the age of 18. If those children are attending college, they can receive the benefit up to the age of 23." (Ballard Spahr LLP)
[Guidance Overview] Court Holds That QDRO Controls Determination of Life Insurance Beneficiaries Because Welfare Plan QDROs Are Not Preempted by ERISA
Excerpt: "EBIA Comment: The list of decisions that recognize a preemption exception for welfare plan QDROs keeps growing. Although the decision in this case (by a trial court in the First Circuit) is not binding precedent there, welfare plans in the Second, Fourth, Sixth, Seventh and Tenth Circuits should be prepared to deal with QDROs. Plan sponsors and insurers faced with conflicting QDRO-based claims to welfare benefits may, as the insurer did in this case, want to consider using interpleader to resolve the dispute and avoid the risk of having to pay benefits twice. Notwithstanding the growing weight of authority to the contrary, we continue to think there are reasons to conclude that ERISA's QDRO provisions properly apply only to pension plans (based on the legislative history and because the QDRO definition appears in Part 2 of ERISA which, under the plain language of ERISA Section 201(1), does not apply to welfare plans). These arguments might yet form the basis for a different conclusion in another federal circuit (or even in the Supreme Court, if the issue ever reaches that court)." (Employee Benefits Institute of America)
[Guidance Overview] ERISA Section 510: The Setting Is Ripe For Claims
Excerpt: "With layoffs continuing into the second half of the year, the setting is ripe for an increase in claims by employees who believe their discharge was motivated by their employers' desire to reduce or avoid benefit plan expenses. And section 510 claims are not necessarily made in a vacuum. They can come as part of a general wrongful discharge claim, age discrimination claim, or a whistleblower action where the employee also alleges the employer attempted to interfere with ERISA-protected rights." (Chang Rutherford & Long)
[Guidance Overview] Employer Liability for Termination of Group Life Insurance Coverage
Excerpt: "Generally speaking, employers are not familiar with the responsibility and potential liability for failing to notify employees of their right to convert group life insurance coverage to an individual life insurance policy upon termination of employment, or their right to apply for a waiver of premiums if they are disabled and absent from work. Within the past few years, there has been a wave of litigation brought by former employees and their beneficiaries complaining about the loss of group life insurance coverage due to misrepresentations made by employers about their group coverage and the failure of employers to inform terminated employees about their rights under the group life insurance plan documents." (Ford & Harrison LLP)
National Compensation Survey: Employee Benefits in the United States, March 2009
Includes updated (March 2009) tables on Retirement benefits; Health care benefits; Life, short-term, and long-term disability insurance benefits; Holiday, vacation, sick, and other leave benefits; Other benefits. (Bureau of Labor Statistics, U.S. Department of Labor)
Local Area Employee Benefits Estimates for 15 Metropolitan Areas
Excerpt: "This article introduces a set of experimental benefit incidence measures for civilian workers in several large metropolitan areas; the data have a reference period of December 2008. These estimates include worker access to three of the main types of employee benefits for which the NCS publishes estimates: retirement benefits, medical care benefits, and life insurance benefits. Because of the relatively small sample sizes for the metropolitan areas, this article reports only access statistics. Access, as defined by the NCS, is having the benefit available for use." (U.S. Bureau of Labor Statistics)
[Official Guidance] From EBSA: 45 Frequently Asked Questions About the EFAST2 All-Electronic Filing System
Excerpt: "I heard that I will have to start filing the annual return/report (Form 5500 or Form 5500-SF) electronically. Can you tell me if that's true and when I would need to start? . . . How can I file my timely plan year 2008 annual return/report if it is due after January 1, 2010? . . . Short plan year 2009 annual returns/reports (Form 5500 or Form 5500-SF) may be due before EFAST2 can receive them in January 2010. How do I file these? . . . When can I register for EFAST2 electronic credentials to sign a Form 5500 or Form 5500-SF?" (Employee Benefits Security Administration, U.S. Department of Labor)
Wife Jailed in Killing Husband Sues Over Denied Spousal Benefits
Excerpt: "Last week, Fayette Nale sued the Ford Motor Co.-UAW Retirement Plan in U.S. District Court in Detroit for refusing to pay her the survivor share of her husband's company pension. Nale's attorney, Sherry Wells of Royal Oak, said a Macomb County jury acquitted her client of second-degree murder when it convicted her of voluntary manslaughter. Nale was a battered wife and because her husband's death happened 'under heat of passion,' she should not be denied a 50 percent share of her husband's pension of more than $1,000 a month, Wells said Tuesday." (The Detroit News)
Congressional Research Service Report on Insurance Regulation: Issues, Background and Legislation in the 111th Congress (PDF)
16 pages. Excerpt: "The individual states have been acknowledged as the primary regulators of insurance as far back as 1868. Since the 1945 McCarran-Ferguson Act, this system has operated with the specificblessing of Congress, but has also been subject to periodic scrutiny and suggestions that the time may have come for Congress to take back the regulatory authority that it granted to the states. In the late 1980s and early 1990s, congressional scrutiny was largely driven by the increasingcomplexities of the insurance business and concern over whether the states were up to the task of ensuring consumer protections, particularly insurer solvency. . . . Although the financial crisis has changed the focus of the debate surrounding insurance regulatory reform, many of the pre-crisis pressures for regulatory changes continue. Narrower bills addressing insurance regulation and regulatory requirements have been introduced in the 111th Congress. These include H.R. 1583, H.R. 2554, H.R. 2571/S. 1363, H.R. 2609, and H.R. 3126. None of these have been considered on the floor of the House or the Senate in this Congress." (U.S. Congressional Research Service)
[Guidance Overview] Remedy Provided by Pennsylvania Revocation on Divorce Statute not Preempted by ERISA
Excerpt: "The Superior Court of Pennsylvania recently held that the remedy provided by revocation on divorce statute is not preempted by ERISA. The decedent and his wife in the case had divorced. The decedent never changed the designation of his ex-wife as the beneficiary of a life insurance policy ,which was part of an employee benefit plan subject to ERISA. After the insurance company paid the ex-spouse, the administrator of the decedent's estate brought a proceeding to require the ex-spouse to turn over the proceeds to the contingent beneficiary under the policy. " (Wills, Trusts and Estates Prof Blog)
[Official Guidance] DOL Begins to Approve EFAST2 Software Vendors for 2009 Form 5500
ftwilliam.com is the first vendor to obtain EFAST2 approval, for the 2009 Form 5500. Excerpt: "EBSA will list on this Web site the private sector companies who have developed software that has been approved for use in transmitting and/or completing the Form 5500 and Form 5500-SF under the EFAST2 system. . . . Information on these products and their vendors' is provided for the convenience of filers. The U.S. Department of Labor does not endorse or warrant these companies, their products, or their services." (Employee Benefits Security Administration, U.S. Department of Labor)
[Guidance Overview] Judge in Visteon Case to Rule on Cutting Retiree Benefits
Excerpt: "A Delaware bankruptcy judge is weighing whether auto parts supplier Visteon Corp. can terminate retiree health care and life insurance benefits for thousands of current and former workers. After a two-day hearing, Judge Christopher Sontchi told attorneys Friday he would consider the evidence and arguments. He gave no indication when he would rule. 'I feel that the record is sufficiently complex and the law is sufficiently complex to require the court to thoroughly review the record,' said Sontchi, whose ruling could affect some 6,600 retirees and their families, and about 1,000 future retirees." (Associated Press)
[Guidance Overview] Opinion from a District Court on QDROs: Their Statutory Basis, Their Purpose, and How They Should Be Structured
Excerpt: "Notably, the court weighs in in a very sensible manner on the never ending question of whether, under ERISA, the divorce decree at issue must comply exactly with the requirements imposed by ERISA to qualify as a QDRO or whether instead, as in horse shoes, close enough counts. In this circuit, close enough is usually good enough, and courts tend to enforce the divorce decree so long as the court is convinced it can accurately ascertain the intent and purpose of the agreement from the decree, regardless of whether the exact detailed requirements that ERISA imposes to qualify as a QDRO have been met." (Stephen Rosenberg of The McCormack Firm, LLC)
[Guidance Overview] Tenth Circuit Determines That Elimination of a Pension Plan's Death Benefit Does Not Violate ERISA's Anti-Cutback Rule
Excerpt: "Under the anti-cutback rule of ERISA Section 204(g), and the parallel anti-cutback rule under the Internal Revenue Code Section 411(d)(6), an employer generally cannot amend it's pension plan to eliminate or reduce: an accrued benefit earned prior to the amendment; an optional form of payment, as to benefits earned prior to the amendment; or a retirement-type subsidy or early retirement benefit, as to benefits earned before the amendment and, in the case of a retirement-type subsidy, for which the service requirements are met either before or after the amendment. But is a death benefit, or a plan feature which pays out a lump sum actuarial equivalent of the death benefit at retirement, protected from elimination by the anti-cutback rule? The Tenth Circuit Court of Appeals says 'no' in Kerber v. Qwest Pension Plan, No. 08-1387 (10th Cir. 2009)." (Stanley D. Baum of Eaton & Van Winkle)
[Guidance Overview] Elimination of Pensioner Death Benefit Did not Violate ERISA
Excerpt: "The 10th U.S. Circuit Court of Appeals has upheld a district court's ruling that Qwest Communications did not violate the Employee Retirement Income Security Act when it amended its Death Benefit Plan, eliminating the Pensioner Death Benefit component. The appellate court agreed with the district court's conclusion that 'the Pensioner Death Benefit d[id] not meet ERISA's definition of a pension benefit because it d[id] not provide 'retirement income to employees,' or 'result in a deferral of income.'' The district court also rejected plaintiffs' argument that the Pensioner Death Benefit was a 'retirement-type subsidy' under ERISA's anti-cutback provision." (PLANSPONSOR.com; free registration required)
[Guidance Overview] After Marriage, Spouse Fails to Consent in Writing to Executed Prenuptial Agreement's Naming of Participant's Child As Beneficiary
Excerpt: "Since there was never an actual spousal consent as required under ERISA, the spouse would be considered the primary beneficiary and unless that surviving spouse properly disclaimed being the beneficiary, he or she would be entitled to the deceased participant assets." (McKay Hochman Co., Inc.)
[Guidance Overview] IRS Clarification of Tax Treatment of Employer-Owned Life Insurance
Excerpt: "The IRS, in Notice 2009-48 (the 'Notice') provided guidance on the taxation of employer-owned life insurance ('EOLI') under Code ??101(j) and 6039I in question and answer form. Although ?101(a) generally excludes from a recipient's income any death benefits payable due to the death of the insured under a life insurance policy, ?101(j), enacted by the Pension Protection Act of 2006, limited the exclusion from the policy owner's income for proceeds payable under EOLI. The Notice is effective June 15, 2009. The IRS has stated that it will not challenge a taxpayer that made a good faith effort to comply with ?101(j) based on a reasonable interpretation thereof before then." (Tax Management Inc.)
Visteon Seeks to Terminate Retiree Health Care
Excerpt: "Visteon Corp. has asked a bankruptcy judge today for permission to terminate its health care and life insurance plans that cover 6,650 hourly and salaried retirees, their spouses and dependents, as well as benefits for 700 potential retirees. [Visteon], in court papers, called the programs a 'crippling financial and competitive burden.' Cutting them, the company said is an unavoidable part of its cost-saving plan." (Detroit Free Press)
[Guidance Overview] IRS Guidance on Employer-Owned Life Insurance After PPA (PDF)
3 pages. Excerpt: "For purposes of filing the information return, the notice clarifies that generally only one taxpayer is required to file Form 8925 with respect to an employer-owned contract. The applicable policyholder 'owning 1 or more employer-owned life insurance contracts' that is required to file is generally the owner of the employer-owned contract and not any related persons." (Buck Consultants)
Retirement Plan Administrator Must Ascertain Marital Status Before Paying Benefits
Excerpt: "Where there is conflicting information about a deceased retirement plan participant's marital status, it is unreasonable for a plan administrator to disburse funds until the conflict is resolved, a federal appeals court has ruled (Smith v. New Mexico Coal 401(k) Personal Savings Plan (10th Cir. June 9, 2009)). The US Court of Appeals for the Tenth Circuit found that a plan administrator acted arbitrarily and contrary to plan procedures when it paid benefits to a deceased participant's children after learning that legal proceedings on the participant's marital status were ongoing." (Mercer LLC)
[Guidance Overview] IRS Guidance on Employer-Owned Life Insurance After PPA (PDF)
Excerpt: "PPA also added a new IRS reporting requirement under Section 6039I for employer-owned contracts issued after August 17, 2006. Last year, the IRS issued final regulations on this new requirement. (See our November 17, 2008 For Your Information.) The IRS has now issued Notice 2009-48, which provides additional guidance on employer-owned contracts after PPA." (Buck Consultants)
[Guidance Overview] IRS Provides Guidance on PPA Rules for Employer-Owned Life Insurance (PDF)
4 pages. Excerpt: "The Internal Revenue Service has published guidance, in question-and-answer format, on a number of outstanding issues arising under the new rules for certain employer-owned life insurance contracts enacted in the Pension Protection Act of 2006 (PPA). New Notice 2009-48 provides the first substantive guidance on these provisions." (Sutherland)
Administration's Budget Proposal Targets Employer-Owned Life Insurance
Excerpt: "Employers would have less future incentive to buy corporate-owned life insurance (COLI) or bank-owned life insurance (BOLI) if a provision in President Obama's 2010 budget proposal becomes law. The provision would eliminate tax deductions for interest payments allocable to policies on officers, directors and employees (other than 20 percent owners)." (Mercer)
[Guidance Overview] 6th Circuit Says ERISA Does Not Preempt State Laws Preventing Insurers From Including Discretionary Language in Insurance Policies
Excerpt: "Two more courts have concluded that ERISA does not block the enforcement of state laws that prohibit 'discretionary' language in insurance policies issued under ERISA plans. (As background, discretionary language reserves discretion to interpret the plan and is required for an insurer to receive a more favorable standard of review if benefit denials go to court.) In these latest cases, insurers (or their representatives) challenged the state laws on ERISA preemption grounds." (EBIA)
[Guidance Overview] IRS's Significant New COLI Guidance on Revenue Code Sections 101(j) and 6039I (PDF)
7 pages. Excerpt: "Notice 2009-48 provides new guidance in the form of seventeen questions and answers, which are divided into five separate categories. Each category and question are addressed separately below, with the numbered paragraphs below corresponding to the questions and answers that appear in the notice." (Association for Advanced Life Underwriting)
[Guidance Overview] IRS Mandate of New Reporting and Notice Obligations for Employer-Owned Life Insurance
Excerpt: "If a life insurance contract is owned by a business, or a person engaged in a trade or business, if the owner is a beneficiary of the life insurance contract (directly or indirectly), and if the individual whose life is insured is an employee (or officer, director, or independent contractor) of the owner (or of a related business) at the time the policy is issued, the contract is potentially subject to the new rules." (Littler Mendelson P.C.)
IRS Releases Notice on Treatment of Employer-Owned Life Insurance
Excerpt: "The U.S. Internal Revenue Service (IRS) has issued Notice 2009-48 which provides guidance concerning the treatment of employer-owned life insurance contracts under Sections 101(j) and 6039I of the Internal Revenue Code in a question and answer format. These sections were added to the Code by Section 863 of the Pension Protection Act of 2006 (PPA)." (International Foundation of Employee Benefit Plans)
Tax-Free Insurance Benefits Reportedly Used to Pay Executive Bonuses, Deferred Pay and Pensions
Excerpt: "Banks are using tax-free benefits from life insurance policies they hold for their employees to pay executive bonuses, deferred pay and pensions, according to a published report Wednesday. Major financial institutions -- including Bank of America (BAC, Fortune 500), J.P. Morgan Chase (JPM, Fortune 500), Wachovia and its parent, Wells Fargo (WFC, Fortune 500) -- are taking increasing amounts of life insurance policies against their employees, and naming the company as the beneficiary, the Wall Street Journal reported. The company receives a tax-free benefit when the employee dies, whether that employee is still working at the company or not, the report said." (CNNMoney.com)
[Guidance Overview] New Obama Administration Tax Proposals Adversely Impact Corporate Owned Life Insurance (PDF)
2 pages. Excerpt: "On May 11, 2009, the Obama Administration proposed a change in the tax law which would adversely affect the use of corporate owned life insurance by businesses. The Administration has proposed this change as one of a number of tax proposals used to fund health insurance reform." (Groom Law Group)
[Guidance Overview] Proposed COLI Deduction Limit Could Impact NQDC Programs
Excerpt: "Employers who have relied on corporate owned life insurance (COLI) to fund either non-qualified deferred compensation benefits or other post retirement benefits not funded in a tax-deferred manner may find that option at least partially closed off in coming months. A client advisory prepared by The Groom Law Group said the restriction could come from an Obama administration proposal to deny a pro-rata portion of the interest deduction based on insurance held on any individual other than a 20% owner of the business. That 'greatly expands' the current situation which, according to the Groom memo, involves pro-rata denial of the interest expense deduction that currently applies to COLI on individuals who are not employees." (PLANSPONSOR.com; free registration required)
[Guidance Overview] State Law Claims Against 'Non-Fiduciary Service Providers' Avert Preemption
Excerpt: "This district court opinion describes a set of facts which touch on several features of an ERISA plan but which, based upon the claim at bar, did not sufficient engage plan administration so as to warrant preemption. The dispute centered on representations and resulting expectations about the performance of a plan designed to meet the requirements of IRS Section 412(i)." (Roy Harmon III via Health Plan Law)
Executive Summaries of Market Surveys on the U.S. Group Disability Market, U.S. Group Life Market, and Absence Management
Excerpt from the group disability survey: 'JHA is pleased to present the 2008 U.S. Group Disability Market Survey. Conducted on an annual basis, this benchmark industry survey covers Group LTD and STD inforce and sales premium results for 2008. Further analysis and data on lapse rates, renewal activity, and ASO are included for those companies that provided this data. Thirty insurance carriers participated in the 2008 Market Survey, representing close to 95% of the group disability insurance marketplace." (JHA, a subsidiary of General Re Life Corporation)
[Guidance Overview] No Penalties for Employer Not Providing COBRA Election Notice for Life Insurance Plan
Excerpt: "EBIA Comment: COBRA applies only to 'group health plans.' Under ERISA, a group health plan must provide 'medical care' within the meaning of Code Section 213(d). (Under the Code and PHSA, a group health plan must provide 'health care,' and the IRS has clarified that 'health care' has the same meaning as 'medical care' under Code Section 213(d).) The controlling term 'medical care' includes the diagnosis, cure, mitigation, treatment, or prevention of disease and any other undertaking affecting any structure or function of the body. COBRA does not apply to most life insurance plans because they do not provide medical care. But each life insurance plan must be examined carefully to determine whether any ancillary benefits for medical care are present." (Employee Benefits Institute of America)
Sidestep Tax Whammy on Retirement Funds: Buy Life Insurance
Excerpt: "If you die with most of your retirement funds intact, your family could get walloped by estate tax on top of a hefty income tax bill for required plan distributions. Strategy: Use retirement plan funds to buy life insurance. When you die, the life insurance benefits are tax-free to the beneficiaries. They can use the cash to pay off their tax bills and pocket the rest." (Business Management Daily)
[Guidance Overview] Reformation Remedy Held Viable Against ERISA Plan
Excerpt: "An Arizona district court refused to dismiss claims for reformaion of an insurance policy in Carbajal v. Dorn, 2009 U.S. Dist. LEXIS 32688 (D. Ariz. Apr. 14, 2009). The opinion provides an interesting perspective on viable claims under ERISA outside the context of a simple claim for benefits. The dispute arose over life insurance policies issued by Liberty under the terms of an employee benefit plan operated by the plaintiffs' employer." (Roy Harmon III via Health Plan Law)
[Guidance Overview] Fifth Circuit Holds That ERISA Plaintiff Waived Arbitration Option
Excerpt: "This is an interesting case out of the Fifth Circuit showing how arbitration rights may be forfeited by invocation of the judicial process. The plaintiff began her suit in state court, but the case was removed." (Roy Harmon III via Health Plan Law)
[Guidance Overview] Widow's Claims Against Employer and Insurer Dismissed Because Death Benefit Was Paid According to Plan Procedures
Excerpt: "EBIA Comment: This case extends the Kennedy case's plan document rule in two ways. First, it concludes that plan administrators can ignore the facts and circumstances surrounding a beneficiary designation as well as any external documents. Second, it uses the plan document rule as a shield against breach of fiduciary duty claims. Whether other courts will adopt these extensions (particularly if the plan administrator is actually aware of circumstances that call a beneficiary designation into question), or be equally willing to apply the LaRue case to insurance benefits (which are readily distinguishable from the retirement benefits at issue in LaRue) remains to be seen." (Employee Benefits Institute of America)
[Guidance Overview] The Nonspouse Beneficiary Change to the Law
Excerpt: "The recently passed Workers, Retiree and Employer Recovery Act of 2008 (WRERA) made several technical corrections to the PPA, one of these corrections being that all qualified plans must permit a non-spouse beneficiary the ability to rollover to an inherited IRA for plan years beginning after December 31, 2009. By way of background, this is a change of a change." (McKay Hochman Co.)
[Guidance Overview] ERISA Fiduciary Breach Based Upon Misrepresentation Claim Survives Where Equitable Estoppel Claim Fails
Excerpt: "This case arises out of a diminuation of insurance coverage promised to eligible retirees under a group benefit plan. The plan contained a reservation of the right to amend the plan and the Court previously dismissed a claim based upon equitable estoppel. So the question before the Court in the present context is this: Can a claim of breach of fiduciary duty for misrepresentation survive where a claim for equitable estoppel did not? The answer, at least at the motion to dismiss stage of the case, is that it can." (Roy Harmon III via Health Plan Law)
Sixth Circuit Upholds Michigan's Discretionary Clause Ban
Excerpt: "In American Council Of Life Insurers v. Ross, No. 08-1406 (March 19, 2009), the Sixth Circuit sustained Michigan's ban on discretionary clauses against an ERISA preemption challenge, finding that the ban was within ERISA's savings clause as a permissible state regulation of insurance." (Roy Harmon III via Health Plan Law)
[Guidance Overview] Court Affirms No Benefits for Death of Unlicensed, Intoxicated Teenage Driver
Excerpt: "The 6th U.S. Circuit Court of Appeals has affirmed an accidental death plan's decision, and a lower court's ruling, that a plan participant is not due benefits for the death of her son in a car crash. According to the court opinion, the 15-year-old boy was unlicensed and intoxicated when he was trying to evade police, leading them on a high-speed chase in a stolen vehicle. The plan determined that the boy's death was not an accident because a reasonable person could not expect to come out of that situation unscathed." (PLANSPONSOR.com; free registration required)
[Guidance Overview] Attorney Discussion of Effect Kennedy Decision Might Have on Drafting of Plan Documents (PDF)
Excerpt: "In response to the U.S. Supreme Court's recent adoption of the ''plan documents'' rule, plan administrators and sponsors should draft explicit plan language addressing whether they will honor extrinsic waivers of benefits contained in divorce decrees, an attorney discussing the implications of the case said March 4 in an audioconference sponsored by the American Law Institute-American Bar Association." (The Bureau of National Affairs, Inc. via Keightley & Ashner LLP)
[Guidance Overview] When Employer Lapses Cost Participants Their Coverage - Wrong Without Remedy?
Excerpt: "This case is reminiscent of the disturbing cases which the Eighth Circuit cites as in accord with its opinion. (See, Amschwand v. Spherion Corp., 505 F.3d 342, 343, 348 (5th Cir. 2007) (section 1132(a)(3)(B) does not permit 'damages in the form of payment of life insurance benefits that would have accrued to a plan beneficiary but for a plan fiduciary's breach of fiduciary duty'); Callery v. U.S. Life Ins. Co., 392 F.3d 401, 406 (10th Cir. 2004)) Here the plan participant, Dr. Pichoff, had $1 million plus in life insurance benefits. A year after acquiring this coverage through his employement, Dr. Pishoff is diagnosed with cancer. You can imagine the consolation he must have taken in the insurance benefits he had obtained." (Health Plan Law)
Detailed Guidance on Kennedy v. DuPont
Excerpt: "Albert Feuer, whose very helpful work on Kennedy v. DuPont we've used frequently (see here for the latest), is once again giving a hand to those trying to figure out how to deal with the Court's decision. After practitioners who didn't consider themselves ERISA experts asked if he could give them some detailed guidance on how to proceed in a post-Kennedy world, he's generously answered the call with his paper, 'Suggestions for the Treasury, the DOL, ERISA Plan Sponsors, Administrators, Representatives of Plan Participants and Potential Beneficiaries After Kennedy v. Plan Administrator of DuPont Savings and Investment Plan.'" (Workplace Prof Blog)
[Guidance Overview] Supreme Court Clarification for Plan Administrators Paying Benefits in Divorce
Excerpt: "The Court's reasoning is rooted in the fundamentals of ERISA. ERISA provides that a plan must be established and maintained pursuant to a written document that specifies the basis on which payments are made to and from the plan. Furthermore, the plan administrator has a fiduciary duty to administer the plan in accordance with the documents and instruments governing the plan. The Court cited this 'plan document rule' as straightforward and uncomplicated, and noted that ERISA encourages clear procedures by which participants may make their intentions known." (K&L Gates LLP)
Delphi Warning on Benefits Tells Retired Salaried Workers to Get Ready for the Worst
Excerpt: "How sure is Delphi Corp. that a judge will allow it to cancel health care and life insurance benefits for salaried retirees? The company that's been operating under Chapter 11 bankruptcy protection is telling those employees to get ready for the worst even before a Feb. 24 hearing on its request. . . . Delphi's request seeks to cut benefits to a total of 15,000 salaried retirees, saving the Troy-based company about $70 million annually and reducing its balance sheet liabilities by $1.1 billion, the company said." (The Flint Journal)
GM Cuts Retiree Benefits as Some Salaried Workers Lose Coverage
Excerpt: "General Motors Corp. is reducing life insurance benefits for most of its white-collar retirees and cutting back on company-provided health care for some retired salaried workers younger than 65 years old. . . . A GM employee compensation document obtained by the Free Press shows that GM is cutting company-provided health care coverage to retired salaried workers who are younger than 65 and eligible for Medicare." (Detroit Free Press)
[Guidance Overview] Supreme Court Says ERISA Plan Language Trumps Ex-Spouse's Waiver of Benefits
Excerpt: "The Supreme Court based its decision on the 'plan document rule,' holding that because plan administrators are required by ERISA to adhere to plan documents, the plan administrator may ignore a purported waiver if the waiver is executed in a manner inconsistent with the plan documents. See Section 404(a)(10)(D) of ERISA. The Court found that honoring the Kennedys' divorce decree would be inconsistent with the plan documents because the plan's 'qualified disclaimer' procedure had not been satisfied. In short, the Court has held that plan administrators should follow the terms of the plan in paying benefits." (McGuireWoods LLP)
Feuer on the Supreme Court's Approach to Death Benefits
Excerpt: "[Albert] Feuer's article, 'Will the Supreme Court Reinforce or Undermine Basic ERISA Principles When it Decides a Death Benefit Dispute,' will soon be published in the Charleston Law Review (Vol 3, p. 289, 2009). The article is now on SSRN." (Workplace Prof Blog)
[Guidance Overview] Analysis: A Waiver of Benefits That Isn't, Says The Supremes
Excerpt: "The Supreme Court settled two issues of workers' benefits law on Monday, giving mostly clear directions to employee plan managers on how they are to deal with the consequences of divorce of a worker. In general, the Court said, an administrator must simply 'look at the plan documents and records conforming to them' to find out who is to be paid the benefits; there is no need, it added, to go to court for the answer." (Akin Gump Strauss Hauer & Feld)
Newport News, VA, City Manager to Present Final Proposal on Retirement Pension Plan
Excerpt: "City Council Tuesday during a special meeting will hear the city manager's final proposal about changes to Newport News retirement pension plan, retiree life insurance and health benefit plans. Under the new proposal, City Manager Randy Hildebrandt would lower the city's contribution to future retirees and their families' health insurance. He would also phase out the elimination of the life insurance for all retirees over the next four years, but ramp up the current death benefit from $3,300 to $10,000, according to a recent memo." (Newport News, Va., Daily Press)
Supreme Court Sides with Dupont in Pension Dispute
Excerpt: "The Supreme Court said Monday that DuPont Co. was correct to pay a deceased worker's retirement benefits to his ex-wife even though she had renounced her rights to the pension during divorce proceedings. The husband, William Kennedy, named his daughter as his new beneficiary after the divorce, but he failed to remove his ex-wife from a form that designated her to receive his company benefits. After Mr. Kennedy died in 2001, his daughter sued DuPont to recover her father's pension money, which totaled $402,000." (The Wall Street Journal)
Captive Insurance Companies Offer Cost Savings for Disability, Life and Health Cost Risks
Excerpt: "[C]omplicated Department of Labor (DOL) rules and a rigorous approval pro?cess have meant that, until recently, few companies have used captives to finance employee benefits plans such as disability coverage and life insurance. A series of green lights from the DOL, however, has established a regulatory 'express lane' for employee benefits and captives." (Milliman)
[Guidance Overview] District Court Adopts Agency Principles Deeming Employer Agent of Insurance Carrier
Excerpt: "The Thrall opinion's patina of historical retrospective on prior Ninth Circuit authority veils the court's remarkable decision to elevate state law notions of insurance law over uniformity in ERISA plan administration. The principal issue - when may an employer be deemed an agent of the insurance carrier for purposes of notice of a change in beneficiaries." (Health Plan Law blog by Attorney Roy F. Harmon III)
Beneficiary Change Valid Despite Lost Form
Excerpt: "A deceased life insurance plan participant's designation of her daughter as a beneficiary was valid and the daughter is entitled to the policy's proceeds even though the plan administrator never received the designation form, a judge has ruled. U.S. District Judge Eldon E. Fallon of the U.S. District Court for the Eastern District of Louisiana said the fact that participant Virginia Clocksin had taken the proper steps before her February 2007 death meant that she had substantially complied with plan rules governing beneficiary designation changes." (PLANSPONSOR.com; free registration required)
[Guidance Overview] ERISA Claims Procedure Violation Did Not Entitle Employee to Reinstatement of Disability Benefits
Excerpt: "ERISA does not specify what happens when the claims procedure rules are violated. The Sixth Circuit has concluded that denying a claim on appeal based on a previously unmentioned reason justifies reinstatement of the participant's disability benefits. But the Fourth Circuit has now squarely rejected that conclusion . . . ." (Employee Benefits Institute of America)
Spousal Insurance Gain in New York State
Excerpt: "The New York State Insurance Department has notified insurance companies licensed to do business in the state that, under current legal precedents, they must recognize the marriages of same-sex couples who live here and married in a jurisdiction that authorizes marriage for same-sex couples. The notice came in the form of a November 21 Circular Letter and addresses entitlement to coverage under insurance policies written in New York." (GayCityNews)
Employer Spending on Benefits, 2007
Excerpt: "[E]mployer spending on total compensation continues to increase, reaching almost $8 trillion at year-end 2007. That is almost 35 percent higher than seven years earlier, in 2000." (Employee Benefit Research Institute)
Text of ASPPA's Comments to IRS Requesting Clarification of Pension Provisions in HEART Act (PDF)
4 pages. Excerpt: "These key clarifications involve the treatment of (1) differential pay as plan compensation, (2) the special withdrawal right for military employees, (3) life insurance held under a qualified plan, and (4) the timing of plan amendments." (American Society of Pension Professionals & Actuaries)
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