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Breach of Fiduciary Duty by Employer for Issuing Inaccurate SPD

A participant sued both his employer and the insurance company with respect to a long-term disability (?Ç£LTD?Ç¥) policy that had been purchased by the employer. The participant alleged an ERISA breach of fiduciary duty for the failure to increase LTD benefits in accordance with the terms of the summary plan description (?Ç£SPD?Ç¥). The U.S. Court of Appeals for the Sixth Circuit ruled that the employer (1) functioned as an ERISA fiduciary when it prepared and distributed the SPD to participants, and (2) breached its fiduciary duty by furnishing the participant with a misleading SPD. In particular, the SPD provision describing the annual increase in benefits did not refer to the other sections of the SPD on which the employer and the insurer had relied to deny the benefits increase. Also, the insurer?ÇÖs self-serving interpretation of the SPD to deny increased benefits was determined to constitute a breach of the insurer?ÇÖs… Continue Reading

April 2015
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