Overestimate of Pension Benefit Not a Fiduciary Breach

August 3, 2012 ( – A recent Employee Retirement Security Act (ERISA) court case demonstrates the importance of disclaimers in retirement plan communications.

By Rebecca Moore | August 03, 2012
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The U.S. District Court for the Southern District of Ohio found Virginia Stark’s breach of fiduciary duty claim failed because Mars Inc.’s pension plan administrator, Hewitt Associates, and its call-in center employees were not acting as fiduciaries when they provided  erroneous pension estimates to Stark. They did not exercise any discretionary authority or discretionary control respecting management of the plan, disposition of its assets, or its administration.   

The court also found that Mars and the pension committee did not breach their fiduciary duty to Stark by relying on the information provided by Hewitt and that any reliance by Stark on the erroneous estimates would have been unreasonable in light of the disclaimers.  

In his opinion, U.S. District Judge James L. Graham said at most, the evidence shows that the Mars employees named in the case “made an honest mistake” based on their good-faith reliance upon the information provided by Hewitt, and that they were at most “guilty of misfeasance, not the malfeasance that estoppel requires."