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Fifth Circuit Permits Retroactive Amendment to LTD Plan

In an unpublished opinion, the U.S. Court of Appeals for the Fifth Circuit (which includes Texas) permitted an employer to rely on an amendment to a long term disability (?Ç£LTD?Ç¥) plan to offset future benefits for a participant?ÇÖs receipt of money from a tort settlement received prior to the plan amendment. The plaintiff in this case was seriously injured in an accident in 1991 and began receiving monthly payments under her employer?ÇÖs LTD plan at that time. Beginning in 1994, the plaintiff received a lump sum payment and monthly payments for 240 months as part of a tort settlement related to her injury. In 1998, the LTD plan was amended to allow the plan to take offsets for monies received from third-parties responsible for an injury. In 2005, the plan sponsor learned that the participant was receiving monies as part of the tort settlement and determined that from 1994-2005 the… Continue Reading

June 2011
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