Employer Wins Case Regarding Mistaken SPD Information

In addition, the plaintiffs conceded that they did not rely on any of the misleading information in the SPD when deciding whether to retire, the 9th U.S. Circuit Court of Appeals found.   

The appellate court had previously sent the case back to a federal district court after finding the ambiguity between the SPD and the plan document being enforced by plan administrators created a triable issue. The district court again granted summary judgment for Northrop Grumman (see “Participants not Due Additional Benefits Based on Defective SPD”).    

On appeal, the 9th Circuit noted that the Supreme Court’s resolution of CIGNA Corp. v. Amara in 2011 overruled, in relevant parts, its two prior decisions that had treated SPD language as if it were an enforceable part of the retirement plan. In holding that the SPD  language  was  not  part  of  the  plan,  the  high court  made  it clear  that  “summary  documents,  important  as  they  are,  provide communication  with  beneficiaries  about  the  plan,  but that their statements do not themselves constitute the terms of the plan for purposes of the Employee Retirement Income Security Act (ERISA) § 502(a)(1)(B), the 9^th Circuit pointed out in its opinion.  

The appellate court concluded that the committee may  have  a  duty  to  enforce  the  terms  of  the  plan, but the terms of an SPD are not the terms of the plan.