The 3rd U.S. Circuit Court of Appeals found that the language in the plan documents for the University of Pittsburgh Medical Center’s 401(a), 403(b), and cash balance plans defined compensation as the employee’s compensation as reportable on Box 1 of Form W-2. Mary Henderson alleged that the medical center violated the recordkeeping requirement of the Employee Retirement Income Security Act by failing to keep records of the hours she had worked, but the appellate court upheld a district court decision that Henderson failed to state a claim because UPMC was only required under ERISA to keep records of wages paid and not hours worked.
The court said the plain language of the plan indicates contributions owed by UPMC are calculated based on compensation paid to the employees. The court noted that ERISA Section 209(a) provides that “every employer shall . . . maintain records with respect to each of his employees sufficient to determine the benefits due or which may become due to such employees.”
According to the opinion, the decision does not prevent Henderson from bringing a subsequent action pursuant to ERISA Section 502(a)(1)(B) to recover benefits associated with any unjustly withheld compensation that she receives if she is successful in her state wage lawsuit.The court’s opinion can be viewed here.