972.392.1143 |
972.934.1269 (Fax)
Articles

Double check the consistency of Summary Plan Documents

A recent Supreme Court decision is a stark reminder for plan sponsors
to double check the consistency of Summary Plan Documents with the current plan
document. In CIGNA Corp. vs. Amara, the Court held that companies can be
responsible for ‘equitable relief’ that occurred when CIGNA changed the plan
from a defined benefit pension plan to a cash balance plan. Regardless of the
circumstances, court decisions are weighing in on the side of the plan
participants in stating that detrimental reliance does not always need to be
established. Companies are exposed to ERISA class action suits, and individuals
are not responsible for citing specific harm.

What you can and need to do: Review your Summary Plan Documents (SPDs)
in light of your plan provisions. Seek the advice of an attorney if you think
you need to add provisions to the SPD or create a more detailed summary in your
plan provision statement. As a precaution, ask your auditor if he/she thinks
that you need additional details to protect your company and plan participants
from discrepancies in documentation.

Tags: , , , ,