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The Supreme Court Holds Participants in Fully-Funded Defined Benefit Plans Cannot Sue for Fiduciary Breach

The U.S. Supreme Court held Monday that participants in a fully-funded defined benefit plan have no standing to bring a lawsuit against plan fiduciaries for a breach of ERISA?ÇÖs fiduciary requirements. In Thole, plan participants alleged that the plan fiduciaries had mismanaged funds and invested in imprudent investments causing the plan to lose approximately $748 million more than it otherwise should have during the 2008 recession. Subsequent to that date, the plan sponsor contributed an additional $311 million to the plan resulting in the plan becoming fully funded. The Court held that because the participants would receive the same benefits whether they won or lost the lawsuit, there was no controversy and, therefore, the participants had no standing under Article III of the U.S. Constitution to bring a civil action under Sections 502(a)(2) or 502(a)(3) of ERISA. Thole v. U.S. Bank N.A., No. 17?Çô1712 (U.S. June 1, 2020) can be… Continue Reading

Another Court Holds that ERISA Benefit Denial Notices Must Disclose Limitations Period for Judicial Review

Consistent with recent decisions from the Third and Sixth U.S. Circuit Courts of Appeal, the First Circuit recently held that a notice of benefit denial under ERISA must include a statement of any time limits for filing a claim for judicial review in order for such limits to be enforceable. In Santana-Diaz v. Metropolitan Life Ins. Co., a participant in an employer-sponsored disability benefits plan subject to ERISA (the ?Ç£Plan?Ç¥) filed a civil action under ERISA Section 502 after he had exhausted the Plan?ÇÖs internal appeals process and received a final benefit denial letter which did not mention the Plan?ÇÖs three-year limitations period for filing a lawsuit. The district court dismissed the participant?ÇÖs lawsuit as being time-barred because it was filed beyond the Plan-imposed three-year limitations period (of which the participant had notice through the group policy booklet). In reversing, the First Circuit interpreted the ERISA claims regulations as requiring… Continue Reading

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