:: ERISA Plan Information Requests: (Unit 1) “Statutory Purpose and Scope”

ERISA already has an elaborate scheme in place for enabling beneficiaries to learn their rights and obligations at any time, a scheme that is built around reliance on the face of written plan documents. The basis of that scheme is another of ERISA’s core functional requirements, that “[e]very employee benefit plan shall be established and maintained pursuant to a written instrument. ” . . .

In the words of the key congressional report, “[a] written plan is to be required in order that every employee may, on examining the plan documents, determine exactly what his rights and obligations are under the plan.” H.R.Rep. No. 93-1280, p. 297 (1974) U.S. Code Cong. & Admin.News pp. 4639, 5077, 5078 (emphasis added) . . . ERISA gives effect to this “written plan documents” scheme through a comprehensive set of “reporting and disclosure” requirements, see 29 U.S.C. §§ 1021-1031 . . .

Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73, 115 S.Ct. 1223, (1995)

This series of articles will attempt to add some milestones along the way as the practitioner evaluates the requirements of participant plan information requests under 29 U.S.C. Section 1024(b)(4). The statute, coupled with the possible per diem penalty under Section 1132(c), forms a frequent complement to claims under ERISA and can register a telling financial blow on unwary or intransigent plan administrators.

The Statutory Mandate

The statute states:

The administrator shall, upon written request of any participant or beneficiary, furnish a copy of the latest updated summary, plan description, and the latest annual report, any terminal report, the bargaining agreement, trust agreement, contract, or other instruments under which the plan is established or operated. The administrator may make a reasonable charge to cover the cost of furnishing such complete copies. The Secretary may by regulation prescribe the maximum amount which will constitute a reasonable charge under the preceding sentence.

The provision can be analyzed by taking the constituent parts in turn as follows:

1. Is there an ERISA plan?

2. What information is subject to the provision?

3. Who is entitled to request the information and from whom?

4. Under what circumstances may a penalty be appropriate and how should it be calculated?

5. What charges are appropriate for furnishing documents under the provision?

This first article will bypass the question of whether an ERISA plan exists as that issue would take the subject far from the primary focus. The first issue, that of information which is subject to the provision, will be taken in two parts – first an overview, and then a more detailed inventory of cases applying the provision to specific facts.

What Information Is Within The Scope of the Provision?

The legislative history suggest that the provision applies to any “plan documents [necessary to] determine exactly what [a participant's] rights and obligations are under the plan.” While that notion may supply a helpful backdrop for evaluation, the caselaw has been more specific, and arguably, less generous to the participant than implied by the broad directive found in the legislative history.

Certain items are easy to identify as subject to the provision, such as the plan document, the summary plan description,the annual or terminal reports and so forth. The troublesome category lies in the open-ended “other instruments under which the plan is established or operated”.

For example, the Second Circuit Court of Appeals, in a frequently cited opinion, stated that:

These stated goals, i.e., of providing plan participants with more significant information about (1) the plans, (2) their rights and benefits, (3) how those rights could be lost, and (4) transactions by plan fiduciaries, in no way suggest that the information to which plan participants are entitled is unlimited. CWA/ITU Negotiated Pension Board of Trustees of the CWA/ITU Negotiated Pension Plan v. Weinstein, 107 F.3d 139 (2d. Cir. 1997).

Thus, in that case, the Court concluded that ERISA did not require plan administrators to disclose actuarial valuation reports.

Likewise, appraisal or valuation reports of employer’s stock and documents furnished to appraisers were deemed outside of the category of “other instruments under which the plan is established or operated” in Faircloth v. Lundy Packing Co, 91 F.3d 648 (4th Cir. 1996). In the view of the Court, these documents were not used to manage or operate the plan even though it was an ESOP.

Formal Legal Documents As The Touchstone

In effect, the phrase “other instruments under which the plan is established or operated” has been interpreted to mean only formal legal documents governing a plan in most instances. The rationale lies in the statutory construction of the provision applying the hoary legal principle of ejusdem generis:

Barring indicia to the contrary, the broad term, “other instruments,” should be limited to the class of objects that specifically precedes it. See Allinder v. Inter-City Products Corp., 152 F.3d 544, 549 (6th Cir.1998) (applying the interpretive principle of ejusdem generis to the term “other instruments” in Section 1024(b)(4)).

Shaver v. Operating Engineers Local 428 Pension, 332 F.3d 1198 (9th Cir. 2003)

Thus, for most courts, the category of documents subject to the statute must fall in a class akin to formal plan documents or pertaining to plan governance.

In this context, for example, the Seventh Circuit has stated:

Plaintiffs argue that this interpretation of the requirement is too narrow, and that they should have a right to all documents that provide information about a plan and its benefits. We agree with our sister circuits that the latter interpretation would make hash of the statutory language, which on its face refers to a specific set of documents: those under which a plan is established or operated. If it had meant to require production of all documents relevant to a plan, Congress could have said so.

Ames v. American Nat. Can Co.170 F.3d 751 (7th Cir. 1999)

Applying this principle, corporate documents have escaped inclusion in the category of Section 1024(b)(4) governing or operating documents. In Ames, the Court stated that the plan administrator was not required to disclose a sales agreement or the related board resolutions. Likewise, in American Life Holdings, Inc., 190 F.3d 856 (8th Cir. 1999), the Court held that corporate actions replacing members of the Administrative Committee, minutes of Administrative Committee meetings, and written communications with bank evidenced the day-to-day operations of ESOP and were not governing documents.

Conclusion

A number of the decisions in this line of cases produce close questions and frequently leave some doubt as to whether the result conforms with statutory intent. Nonetheless, as stated by the Supreme Court in its evaluation of the reporting and disclosure provisions: “This may not be a foolproof informational scheme, although it is quite thorough.” And then, perhaps resignedly, “Either way, it is the scheme that Congress devised.”

Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73, 115 S.Ct. 1223, (1995)

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