Erroneous Statement Does Not Mean Higher Benefits

District Judge Harold Baer found the erroneous benefit statement in question clearly laid out that the statement was only an estimate of future benefits, not a guarantee, as charged by the plaintiff in Hart v Equitable Life Assurance Society.

“Here, all of the written statements with projected monthly benefits that plaintiff received contained cautionary language that the amounts indicated were estimates subject to a final audit. I find that the cautionary language contained in these statements certainly does not rise to the level of ‘affirmative misrepresentations’ that would constitute a breach of defendants’ fiduciary duty,” Baer said in the summary judgment.

Benefit Gap

Mary Hart had worked for Equitable Life Assurance Society from 1961 through 1963, before returning to the company in 1976.   Her employment with Equitable then continued uninterrupted until her position was eliminated in January 1988.  

A computerized system sent benefit statements to Hart in 1995, 1996 and 1997, showing estimated monthly retirement payments between $1,100 and $1,290.   In 1998, as Hart elected for retirement, the company discovered that her previous retirement benefit estimates had been in error, crediting her with an extra 10 years of service and took necessary steps to correct the error; now reflecting retirement payments would be approximately $550 per month.  

Hart sued Equitable, arguing that the doctrine of equitable estoppel obligated Equitable to pay the benefits earlier promised and that Equitable breached its fiduciary duties with the erroneous statements.

Cautionary Tale

In the summary judgment, the Court found the equitable estoppel doctrine could not be enforced in this case, due to the cautionary language contained in the statement that benefit estimates were not a guarantee of future benefits.

Further, the Court dismissed claims of an ERISA fiduciary breach saying Equitable “anything but affirmatively misrepresented the monthly benefits by candidly stating that they were estimates subject to change upon final review.”