Under the Employee Retirement Income Security Act (ERISA) pensioners are entitled to a pension benefit statement within 30 days of their written request. Plan administrators who refuse to comply with this rule risk getting sued for monetary penalties, as illustrated in the following recent pension case: Carr v. Abington Mem’l Hosp., No. 23-cv-1822 (E.D. Pa. Aug. 8, 2024).
In Carr, Alice Carr participated in a pension plan sponsored by Thomas Jefferson University. The Jefferson plan was later merged with a pension plan sponsored by Abington Memorial Hospital which administered pension claims brought under the Jefferson plan. Under the Jefferson plan, in order to be vested, an employee had to complete five years of service of 1,000 hours or more of work in each calendar year.
When Carr applied for her pension, Abington determined she was ineligible to receive it because she had only 950 hours of service in one of the five years she had worked for Thomas Jefferson–1997–and therefore she was unvested. Carr disagreed, claiming she had 1,009 hours of service in 1997. In support, Carr pointed to her 1997 Social Security earnings records which showed $300 more in earnings than reported in the plan’s records. Abington nonetheless denied Carr’s pension claim, reasoning the plan’s records consistently showed she worked only 950 hours in 1997.
Unwilling to accept this decision, Carr sued Abington for the pension benefits. She also sued Abington for statutory penalties of $110/day under the ERISA for failing to timely provide her with a pension benefit statement within 30 days of her written request.
On Carr’s claim for pension benefits, the court observed that wages earned and number of hours worked are two different things. Because Abington had proffered plan records that consistently showed Carr had worked only 950 hours in 1997, while Carr proffered only her Social Security earnings records, the Court concluded that Abington had reasonably denied Carr’s claim for pension benefits. But that was not the end of the court’s rulings.
The court explained that, under ERISA, pension plan participants are entitled to a pension benefit statement within 30 days of making a written request, and that Carr’s attorney had repeatedly made such request on behalf of Carr before filing the lawsuit. Finding that Abington had intentionally refused to provide the pension benefit statement for 37 days after the 30 days were up, the court awarded Carr $4,070 in statutory penalties ($110 x 37 days) for this lapse. Thus, a small victory for Carr on her claim that Abington was dilatory in providing her pension benefit statement.
But ERISA’s statutory penalties apply to other documents, as well, that also must be furnished within 30 days of a participant’s written request. These include a copy of the pension plan, the most recent summary plan description, the annual report for the plan, and any bargaining agreement, trust agreement, contract, or other instruments under which the plan is established or operated. Hopefully, the court’s ruling on statutory penalties in the Carr case will encourage other plan administrators to be vigilant in timely complying with ERISA’s document disclosure rules.
This pension post was written by pension lawyer Eva Cantarella who can be reached at 248-3355000 or [email protected]. To read more pension posts by Ms. Cantarella, go to her Pension Justice 4 You Facebook page.
