Duty to Disclose Information to Non-participant or Non-Beneficiary

[Guest RW]

What is a plan administrator's duty to disclose information about pension and other employee benefits plans to parties who are related to deceased participant, but not named anywhere as beneficiaries? Attorney requests information for beneficiaries name on all employee benefit plans.

[KIP KRAUS]

RW:

I personaly would consider beneficiary information to be confidential. In the absence of a court order I wouldn't provide any information related to plans or named beneficiaries.

This is just my management opinion and not founded on any quotable legal precedent.

Contact your ERISA attornies.

[Kirk Maldonado]

Kip is right. I seem to recall that there is at least one DOL Advisory Opinion on point as well as one or two court cases.

[Bill Berke]

Kip and Kirk are correct. The whole flavor of disclosure under ERISA is to participants and beneficiaries only (or their authorized representative). No one else. I get a perverse pleasure telling blustering and posturing attorneys they can't get info requested.

[Guest RW]

What if the attorney represents the personal representative of the deceased participant's estate. Is he considered an authorized representative of the participant? Any cites?

[KIP KRAUS]

RW

Get the evidence before releasing anything.

[pjkoehler]

If the plan provides a death benefit that is payable, in the absence of a surviving designated primary or secondary beneficiary, to the participant's estate, then the personal representative or administrator of the estate should be treated as a "participant" and would be entitled to receive the information described in ERISA Sec. 104(B)(6) within 30 days of filing a written request with the plan administrator and to avail itself of the plan's claims procedure. It would probably fall below ERISA's "exclusive purpose" fiduciary standard for the administrator to adopt a passive or uncooperative posture once presented with reasonable proof that the participant is deceased (e.g. certified copy of death certificate). Of course, the administrator will want to satisfy itself that the personal representative or administrator has been duly appointed in accordance with state law and has, in fact, engaged the attorney making the request for submitting the claim. Beyond this, it is difficult to see how the interests of the plan are protected by playing "tough guy" with the attorney seeking the information, it merely exposes the administrator to the risk of defending itself against allegations of (1) violations of ERISA Section 104(B)(6) (subjecting the plan administrator to a civil penalty of $100 per day in the discretion of the court for each day that the plan's response to the written request is late, up to $1000), and fiduciary liability for failure to follow the plan's claims procedure.

[This message has been edited by PJK (edited 04-19-2000).]

[This message has been edited by PJK (edited 04-19-2000).]

[This message has been edited by PJK (edited 04-19-2000).]

[This message has been edited by PJK (edited 04-19-2000).]

[KIP KRAUS]

I don't know that requiring reasonable evidence from the requesting attorney is being a tuff guy. If the requesting attorney has a legal right to the information, he/she should expect to prove that he/she does, and the Plan Administrator has a the feduciary liability of insuring that what it provides is being provided on a right to know basis.

[Bill Berke]

You can/should believe a written statement from the attorney regarding his/her representation. Only a fool or an outlaw would lie because of the legal ramificatons of misrepresenting who is the lawyer's client. However, if the participant has a bene designaton on file and you (plan admin) knows of death, then it is the bene who is now entitled to info not the estate. Things change at the moment of death - ask your local estate planner And there are lots of cases in benefits law regarding beneficiary designations and challenges.

[pjkoehler]

It is not uncommon for an attorney representing the administrator of a deceased participant's estate to contact the plan admininstrator and request ERISA Section 104(B)(6) documents and information about any and all plans in which the deceased participated. This is a perfectly legitimate and frequently necessary enterprise. None of the documents governed by section 104(B)(6) is even remotely confidential. In fact, they are to a large extent public record. The problem with verifying a person's "right to know," is that it requires the plan administrator to walk a very fine line between establshing that right and interfering with the exercise of that right. If you read enough employee benefits cases, you'll discover that plan fiduciaries are far more likely to be exposed to fiduciary liability by subjecting participants, deceased or living, to special burdens in demonstrating their "right to know" because they are represented by counsel ("blustering and posturing" or otherwise), than they are by giving them this information after a rudamentary inquiry, even if it turns out they didn't have to. It comes down to a risk-management analysis, that, given ERISA's public policy underpinnings, will almost never favor less or less rapid disclosure, rather than more or more rapid disclosure.

[KIP KRAUS]

I guess you haven't gotten the picture yet. I agree that if there is written representation that an attorney is representing the estate of the deceased, one should honor the request for information.

I know the commonality of attorney requests for information in these cituations. However, if the attorney is representing someone other than the deceased's estate, or executor and there is no evidence that this person has any rights under our ERISA Plans, I'm going to be looking for a court order before releasing confidential information.

Let us not be mistaken, plenty of attornies write letters that have little or no veracity.

Everyone cooperates with attornies when cooperation is necessitated. Lighten up out there folks. No one is doubting your rights to request information that you or your client is entitled to.

[pjkoehler]

As I understand the concept of these message boards, the "picture" or issue is framed by the contributor who started the topic. That would be "RW" in this case. RW's follow-up specifically assumes that the attorney in question "represents the personal representative of the deceased participant's estate." Now if you want to digress that's cool, but maybe you should start a new topic. At any rate, you apparently do not realize that a determination of whether a person is a "participant" or "beneficiary" under an ERISA Title I plan, or whether legal counsel represents such a person, is an inherently fiduciary function. Telling a putative participant or his legal representative to go get a declaratory judgment and a court order before you'll provide them with section 104(B)(6) documents, where the fiduciary could readily elicit the facts necessary to make its own determination, erects a barrier to the exercise of that person's ERISA rights. Imagine the "picture" if you will of the plan administrator (who will most certainly be cross-claimed into the proceeding) explaining to the court that the reason this person is subjected to the time and expense of litigating this basic issue is because you refused to even attempt to make that determination in the exercise of your fiduciary responsibilities or to provide him with the information that would help clarify those rights. Not a good way to start off your argument that you're protecting the interests of the plan. Get the "picture."

[This message has been edited by PJK (edited 04-20-2000).]

[KIP KRAUS]

I didn't interpret RW's "what if" question as verifying that the attorney was representing the deceased's estate. It was a question, not a clarification.

I would hope RW would not refuse information to an attorney who represents that he is representing the deceased's astate.

Thanks PJK for clarifying the purpose of the Message Board. I guess I was confused all this time.

[Guest hank]

A letter from a lawyer claiming to represent the deceased participant's estate/personal representative isn't enough for the plan administrators I represent. I tell them that before they release any participant data or information, or attempt to comply with requests for mandatory disclosure under ERISA to persons (including estates) other than the participant or beneficiary, they need to obtain (a) the participant's death certificate; (B) the "official" court document appointing the personal representative (here in Pa. those are called

letters of administration or something like that); and © (this is important) a letter from the personal representative indicating that the lawyer does, in fact, represent the estate. Why? We've had a number of bad experiences where no beneficiary designation is on file (don't ask!), the plan default beneficiary is the participant's estate, and several potential "claimants" (and their attorneys) have written asking for data and documents. An administrator shouldn't get nailed for delaying providing mandatory disclosure while taking the time to ascertain the bona fides of the party making the request.

[KIP KRAUS]

Sounds reasonable to me Hank. Thanks for the input.

[pjkoehler]

I agree with Hank's suggested procedure, but not with his response to his own question: "Why?" ERISA Sec. 3(8) defines the term "beneficiary" to mean "a person designated by a participant, OR BY THE TERMS OF AN EMPLOYEE BENEFIT PLAN, who is OR MAY BECOME ENTITLED TO A BENEFIT THEREUNDER [emphasis added]." ERISA Sec. 104(B)(4) requires the administrator to provide the specified information within 30 days of receiving a written request from "any participant or beneficiary." Note that the administrator's obligations under sec. 104(B)(4) do not distinguish between persons that the participant designated as beneficiaries and persons who by operation of the plan "may become entitled to a benefit thereunder." The latter have an equally enforceable right to the information. Obviously, persons who have never had access to the plan documents or SPD, because their interest arises only by operation of the plan upon the participant's death, must seek clarification of their interest in the plan, if any. ERISA was intended to provide broad disclosure of the documents specified in 104(B)(4), even to persons whose mere "potential claim" turned out not to be supported by the plan. Such an arrangement makes much more sense if your protecting the interests of the plan, than advising administrators to take a "see you in court" attitude every time somebody whose name doesn't pop on your beneficiary designation records, or his lawyer, asks for 104(B)(4) documents. Courts have grown increasingly intolerant of plan fiduciaries that punt every tough judgment call about benefit claims. ERISA requires a plan to maintain a claims procedure. Better to provide the documents, allow the person to analyze his interest and process any forthcoming claim in routine, i.e. denying it where the person fails to establish eligibility for the benefit, than stiff-arming them or their lawyers about access to relevant plan documents.

[This message has been edited by PJK (edited 04-27-2000).]