Incorrect Vesting % on Annual Statements

[chris]

Participant received 2 years of statements which reflected participant as 100% vested. participant requested a distribution relying on the fact that the statements showed the vested percentage as 100%. Company cut a check for vesting % based on participant's years of service, 40%. Any recent cases, misrepresentation, etc... where participants have been successful in pursuing such a situation?

[pjkoehler]

chris: Are (1) plan docs, (2) SPD and (3) all other written and oral communications consistent regarding the plan's vesting schedule and it's only these benefit statements that are inconsistent? If that's so, the participant is left with a mere promissory estoppel argument in support of his wrongful denial claim. The elements of such a claim include (1) the employee's "reasonable" reliance on the employer's promise (erroneous vested percentage computation) and (2) an injustice can be avoided only by enforcing the "promise." Gramm v. Bell Atlantic Mgt., DC NJ (1997). If the employee received an SPD that contained unambiguous vesting terms that were inconsistent with the benefit statements, it's going to be a stretch for the employee to show that he "reasonably" relied on the computation in the statement (at least without further inquiry of HR). Even if a court finds that his reliance on the statement was "reasonable," giving him a windfall does not avoid an injustice since the employer only seeks to enforce the terms of the plan in a uniform and nonselective manner. Id. See also Slice v. Sons of Norway, 34 F.3d 630 (8th Cir. 1994) (no injustice is prevented by enforcing erroneous lump sum calculation in favor of employee).

[chris]

Thanks for the reply. The initial issue I saw was that there was no detrimental reliance, and even if there were,........ The only place 100% vesting was reflected was on the annual benefit statements.