Trustee denying a claim

[Guest jfreeborn]

I think I should have posted this here:

I recently submitted a claim for benefits on behalf of my client. The claim is for waiving a DB Plan's recoupment efforts. The Plan assets are held in trust by Bank. Legal counsel for Bank wants me to direct all communication to him, and when I submitted a claim to waive recoupment, the Plan Administrator did not respond. The Bank's lawyer responded, referencing my claim as a letter, and didn't address its points at all. What should I do...write to Plan requesting decision from them? The Plan Doc and SPD specifically state there is a benefits committee that responds to disputes and claims.

[Andy the Actuary]

Pardon my inexperience with your terminology. It is unclear what are the facts, circumstances, and issues. Has your client been denied benefits? If so, under what circumstances? Please elaborate.

[david rigby]

Legal counsel for Bank wants me to direct all communication to him ...

Notwithstanding Andy's excellent question, who cares what the Bank's counsel says?

The Plan's appeal procedure will be outlined in the Summary Plan Description.

[SoCalActuary]

From the hints offered by the OP, this appears to be a recovery of a past overpayment of benefits. The Plan Administrator has already stated what the benefit amounts should be. The bank just overpaid them in the past. Now the bank is responsible for recover, because they have already indemnified the plan for the overpayment.

Is this the correct scenario?

[Guest jfreeborn]

From the hints offered by the OP, this appears to be a recovery of a past overpayment of benefits. The Plan Administrator has already stated what the benefit amounts should be. The bank just overpaid them in the past. Now the bank is responsible for recover, because they have already indemnified the plan for the overpayment.

Is this the correct scenario?

Sorry for not elaborating more. The Bank/Trustee sent the original letter stating that there was an overpayment. The bank accidentally increased participant's amount. Now, years later, they want the amount back, and have completely eliminated participants benefit until its repaid. My issue is that I submitted a claim to the address of the Plan Administrator (listed in SPD) and copied counsel for Bank. The Plan doesn't really want to deal with it. They refer me to the Bank.

Maybe I should write another letter demanding a decision from the Plan Administrator.

[Andy the Actuary]

You would need to check case law to determine whether or not "withholding a pension" is permissible irrespective of their reason. They may be hanging their hats on a "non-duplication of benefits" plan provision. In any event, there are a lot of choice acronyms (IRS, DOL, PBGC) whose allusion to in a letter might get the plan admnistrator to respond. In accordance with Mr. Rigby's comment, there is a designated claims procedure detailed in the plan document, the essence of which is prescribed by ERISA. Failure to comply is punishable by fine.

[QDROphile]

I don't recall a fine relating to noncompliance with ERISA claims procedures. It may be a breach of fiduciary duty to disregard claims, but I think the consequences of failure to comply with the procedures described in the regulations are that the claimant can go directly to court and the plan loses the procedural benefits of making decsions through a valid claims procedure. Please elucidate about the fine.

[Andy the Actuary]

I don't recall a fine relating to noncompliance with ERISA claims procedures. It may be a breach of fiduciary duty to disregard claims, but I think the consequences of failure to comply with the procedures described in the regulations are that the claimant can go directly to court and the plan loses the procedural benefits of making decsions through a valid claims procedure. Please elucidate about the fine.

I won't challenge. I simply thought that failure to do anything (e.g., distributing notices) within the prescribed time limit subjected the p.a. to DOL penalties.

[SoCalActuary]

From the hints offered by the OP, this appears to be a recovery of a past overpayment of benefits. The Plan Administrator has already stated what the benefit amounts should be. The bank just overpaid them in the past. Now the bank is responsible for recover, because they have already indemnified the plan for the overpayment.

Is this the correct scenario?

Sorry for not elaborating more. The Bank/Trustee sent the original letter stating that there was an overpayment. The bank accidentally increased participant's amount. Now, years later, they want the amount back, and have completely eliminated participants benefit until its repaid. My issue is that I submitted a claim to the address of the Plan Administrator (listed in SPD) and copied counsel for Bank. The Plan doesn't really want to deal with it. They refer me to the Bank.

Maybe I should write another letter demanding a decision from the Plan Administrator.

OK, so I understand that the participant is holding money that the plan does not provide, because the bank made an error.

What is your legal theory that the participant can continue to hold these ill-gotten gains?

[RCK]

As long as you have access to the Plan and the SPD, why don't you check for language that allows the administrative commitee to either implicitly or explicitly delegate its authority. That would give the attorney the authority to act on its behalf.

That does not of course excuse the attorney from compliance with the plan's rules.

Our plan also includes limits on the amount by which a monthly benefit can be reduced to adjust for past overpayments, so you may want to look for that.