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District Court Finds Document Reformation and Surcharge to be Appropriate Remedies Under ERISA 502(a)(3)

In Amara v. CIGNA Corporation and CIGNA Corporation Pension Plan, the U.S. District Court for Connecticut recently held that appropriate equitable remedies under ERISA section 502(a)(3) included reformation and surcharge.?á The court found that the plan sponsor?ÇÖs deficient notice describing the benefits available under the plan constituted fraud, and that the fraudulent notice, when coupled with the employees?ÇÖ misunderstanding of the notice, provided a basis for reforming the plan document, without the participant plaintiffs showing individualized reliance and harm.?á Under the reformed document, participants became entitled to additional benefits.?á Furthermore, the court found that the plan sponsor could be surcharged under either a make-whole or unjust enrichment theory.?á The surcharge would provide relief in the form of monetary compensation to the participants for the loss resulting from the breach of duty.?á The court ordered that all remedies provided in the opinion be stayed to allow the parties to pursue an appeal to the Second Circuit if they so choose.?á A copy of the court?ÇÖs decision can be found here.

The lawyers of our Employee Benefits and Executive Compensation Practice Group are readily able to assist companies on a nationwide basis with implementing sophisticated benefit plans and providing answers to their most challenging compensation issues. Additionally, our lawyers are well aware of the daily employee benefits challenges facing companies of all sizes and are capable of helping in-house lawyers and human resources personnel with the day-to-day advice and guidance necessary to properly administer employee benefits plans.

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January 2013