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Plan Administrators are Afforded Broad Discretion with Appropriate Language in ERISA Plan Documents

In the case of Hall v. Metropolitan Life Insurance Co., the U.S. Court of Appeals for the Eighth Circuit ruled that MetLife had not abused its discretion in denying a widow’s claim for benefits under her husband’s life insurance policy, which was subject to the Employee Retirement Income Security Act (“ERISA”), where the plan document explicitly vested MetLife with the discretionary authority to interpret the terms of the plan and to make determinations concerning the eligibility for and entitlement to benefits under the plan. The court also noted that the “substantial compliance” doctrine under federal common law could not deprive MetLife of its discretion to require strict compliance with the plan’s terms. Although this case does not represent a break from prior law, it does serve as a reminder that plan sponsors should ensure that their plan documents give full discretion to plan administrators to interpret the plan’s terms and to make eligibility and benefit determinations under the plan, including factual determinations.  Hall v. Metro. Life Ins. Co., No. 13-1332 (8th Cir. May 8, 2014).

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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May 2014
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