Compliance

Informal Inquiry Protected Under ERISA Section 510

By Kristen Heinzinger editors@plansponsor.com | October 09, 2012
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October 9, 2012 (PLANSPONSOR.com) – A federal appellate court has ruled that an informal inquiry by a retirement plan participant about mismanagement of plan assets is protected activity under the Employee Retirement Income Security Act (ERISA).

The 7th U.S. Circuit Court of Appeals found that the wording in Section 510 of ERISA is vague—particularly the definition of “inquiry”—and that when dealing with ambiguous anti-retaliation provisions, it is supposed to favor the protection of employees. ERISA Section 510 prohibits retaliation “against any person because he has given information or has testified or is about to testify in any inquiry or proceeding relating to this [Act].”

The appellate court dismissed a district court’s opinion in favor of Junior Achievement of Central Indiana Inc. and sent it back for further proceedings. Junior Achievement argued that former vice president Victor George could not make a Section 510 claim because Section 510 only protects testimony in formal proceedings and formal inquiries by the employer of the participant, and not by the participant of the employer. 

The appellate court found that the best reading of Section 510 is one that divides the world into the informal sphere of giving information in or in response to inquiries and the formal sphere of testifying in proceedings. It determined that George’s complaints constituted an “inquiry” because Junior Achievement responded to them rather than ignoring them.