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Fifth Circuit Holds Disability Benefit Offset Inappropriate Because of Ambiguous Language in Summary Plan Description

Verizon maintained a long-term disability plan (the ?Ç£LTD Plan?Ç¥) insured through MetLife, who had the discretionary authority to interpret the LTD Plan and to adjudicate claims. In 2007, an employee became eligible to receive benefits under both the LTD Plan and a Verizon pension plan due to disability, and the employee elected to take his full pension benefit as a lump sum and then roll it over into an IRA in a direct trustee-to-trustee transfer. The LTD Plan?ÇÖs summary plan description (the ?Ç£SPD?Ç¥) contained language stating that a participant?ÇÖs long-term disability benefits ?Ç£may be reduced by other sources of disability income,?Ç¥ including ?Ç£pension benefits from a Verizon pension plan, if the beneficiary elects to receive them.?Ç¥ MetLife offset the participant?ÇÖs monthly disability benefit by the amount of the pension benefit he had rolled over into his IRA. The participant appealed countering that because he would not actually receive any of… Continue Reading

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