Second Circuit holds that participants not entitled to actuarial reports; Eighth Circuit holds that employer-sponsored HMO must disclose incentives paid to doctors to limit referrals

Article Abstract:

The US Courts of Appeals for the Second and Eighth Circuits reached opposite conclusions in two cases involving the scope of information that must be disclosed to plan participants under the Employee Retirement Income Security Act (ERISA). The Second Circuit found in Board of Trustees of the CWA/ITU Negotiated Pension Plan v. Weinstein that ERISA did not require disclosure of actuarial valuation reports. In Shea v. Esensten, the Eighth Circuit found that a health maintenance organization should have disclosed to plan participants that doctors were offered incentives to minimize referrals.

Health insurance, Health maintenance organizations

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Employer may not amend top-hat plan to deny accrued benefits

Article Abstract:

A federal district court has ruled in Carr v. First Nationwide Bank that an employer cannot take away people's entitlement to accrued benefits by amending a top-hat plan. The court explained this holding by applying the unilateral contract theory to the plan, which would dictate that amendments apply only to income deferred after the amendment's effective date. The suit was brought by three plan participants who retired before the plan was amended and were questioning the company's right to reduce their benefits by altering the interest rate paid.

Compensation and benefits, Executives, Executive compensation

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IRS approves retroactive plan amendment reducing accrued benefits rather than waive minimum funding standard

Article Abstract:

The IRS allowed for the unusual remedy in Private Letter Ruling 9614004 of allowing a defined benefit plan to be amended retroactively to reduce accrued benefits. The requested reductions were bargained for with the union and were part of the employer's plan to reduce costs to remain in business. Retroactive amendments are allowed if business hardship makes the amendment necessary and if funding standards waiver would not be adequate. The IRS felt that waiver would not provide sufficient savings.

Economic aspects, Laws, regulations and rules, Defined benefit plans

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