SPD No Good Because of Survivor Benefits Warning Lack

October 27, 2003 (PLANSPONSOR.com) - A company's summary plan description (SPD) without explicit directions to domestic partners to file an affidavit to qualify for survivor's benefits was deficient based on ERISA's disclosure rules, a federal appeals court ruled.

>The US 2 nd Circuit Court of Appeals ruled that was true, particularly because numerous references to the affidavit requirement regarding other benefits were elsewhere in the SPD and company handbook, according to Thompson Publishing.

Furthermore, in ruling for the employee and surviving wife based on their previous domestic partnership, the appeals court opted to apply the legal standard that they were “likely prejudiced” as a result of the deficient SPD rather than analyzing whether or not they detrimentally relied on the SPD.

The 2nd Circuit also found the employer’s notice to the wife informing her of the right to appeal its benefits rejection decision deficient because it specified that the appeal “should,” rather than “must” or “shall,” be filed within a prescribed time.

In addition to establishing the prejudice rule for the 2nd Circuit, the ruling lays out significant requirements for SPDs and clarifies claims denial standards. The case is Burke v. Kodak Retirement Income Plan and Committee, 336 F.3d 103, 2nd Cir., July 17, 2003.