Associate, Dinsmore & Shohl, Cincinnati Ohio. J.D. 2004, magna cum laude, Salmon P. Chase College of Law, Northern Kentucky University; B.S. History, United States Naval Academy (1994).
Professor of Law, Salmon P. Chase College of Law, Northern Kentucky University.
With today's rising cost of living, increased cost of health care, and longer life expectancy,1 most working Americans place considerable value on an employer's pension plan, health insurance, and other benefit plans.2Imagine an employee, or former employee, engaged in a dispute over benefits or pension. Perhaps the dispute involves an employer's unilateral decision to terminate its pension plan, institute a cheaper plan, and pocket several million dollars in the process.3 Perhaps the employer changes supplemental life insurance carriers and, in the process, a forty-year veteran of the company loses coverage.4 Finally, imagine a retiree whose spouse suffers a fatal heart attack and stroke within one month of the employee's retirement, only to find out that medical coverage was not properly transferred from the employee plan to the retirement plan.5
Further imagine that the employee has sought the advice and representation of counsel in resolving the dispute. During the course of representation, counsel has requested certain plan documents and instruments from the plan administrator. Many Americans likely assume that their attorney is fully authorized to request these plan documents on their behalf. After all, most employees would probably not know where to begin in resolving these sorts of legal issues; if the employee knew how to resolve the problem, it is unlikely the employee would have hired an attorney. However, a written request for plan documents made by an attorney on behalf of a client does not always trigger a duty of disclosure on the part of the plan administrator.6
The Employee Retirement Income Security Act (ERISA)7 does not require that employers provide their employees benefits, but rather controls the law of employee benefit plans.8 In governing the law of employee benefit plans, ERISA imposes a duty to disclose certain information to employees.9 Summary plan descriptions,10 annual reports,11 terminal reports,12 instruments which establish or operate the plan,13 and information regarding vesting all are covered by this duty of disclosure.14However, courts interpret the duty of disclosure under ß 1024(b)(4) differently.15 The Tenth and Third Circuit Courts of Appeal both have found that a written request by an attorney representing a plan participant or beneficiary triggers a duty of disclosure on the part of the plan Page 805 administrator under ß 1024(b)(4).16 The Sixth Circuit Court of Appeals, on the other hand, has found that, absent written authorization by the plan participant or beneficiary, a written request for plan documents by an attorney does not trigger a duty of disclosure.17
This Article argues that an attorney's written request on behalf of a plan participant or beneficiary should trigger the plan administrator's duty of disclosure under ERISA ß 1024(b)(4) without prior written authorization of the client. Part II provides the background for the current circuit split. It begins with a historical overview of ERISA, then discusses the ERISA duty of disclosure in general terms. Part II concludes with a discussion of recent district court opinions interpreting ß 1024(b)(4). Part III discuses both sides of the current split in authority.
Part IV explains the various legal arguments for and against imposing a duty of disclosure and provides support for the authors' conclusion that an attorney's written request should trigger such a duty. First, Part IV looks at the plain language of ß 1024(b)(4). Second, Part IV considers how recent opinions have interpreted the legislative history and congressional objectives behind ERISA's disclosure requirements. Third, this section analyzes the impact of Department of Labor Advisory Opinion Letter 82-012A on ß 1024(b)(4) analysis. Fourth, the section discusses those opinions which base their rationale on whether an attorney's written request for plan documents places a plan administrator on sufficient notice of the information sought. Finally, this section considers the long-standing presumption that an attorney is authorized to speak on behalf of and represent his or her client.
ERISA is a large, highly-technical, and complex piece of legislation.18Before discussing ß 1024(b)(4) and the duty of disclosure, it is necessary to set the stage with some background on ERISA. This Part begins with a brief discussion of the history of ERISA, its scope, and some of the Congressional goals in its enactment. It then discusses ERISA's duty of disclosure in general terms. This Part concludes by discussing some recent district court opinions addressing the duty of disclosure under ß 1024(b)(4).
As recently as the early twentieth century, pension and benefit plans were unheard of for many American workers.19 The few existing pension plans were largely unregulated and often financially insolvent.20 However, in the first half of the twentieth century, several Congressional actions put the wheels of pension reform in motion: the Revenue Acts of 1921 and 1942 and the Social Security Act.21 The Revenue Act of 1921 created a huge incentive for employers to make pension contributions on behalf of employees by allowing a tax deduction for such contributions.22Additionally, the 1942 Revenue Act disallowed deductions where the employer included only executives, officers, or highly-compensated employees and not the rank and file.23 The Social Security Act, on the other hand, showed a clear governmental intent, in the aftermath of the Great Depression, to provide all working Americans with a baseline retirement income.24
Nonetheless, neither the Internal Revenue Code nor the Social Security Act did anything to regulate existing private pension plans.25 The first attempt at any meaningful pension reform came in 1958 with the enactment of the Welfare and Pension Plans Disclosure Act (WPPDA).26While the WPPDA required plan administrators to furnish plan descriptions and file annual reports with the Department of Labor and with plan participants, it did not provide any enforcement mechanisms or safeguards for existing employee plans.27 The notion that informed plan participants could adequately regulate and enforce plan administration without government oversight fell short of the mark.28
The dam finally broke in 1963,29 when Studebaker Corporation closed its South Bend, Indiana manufacturing facility and put several thousand employees out of work.30 Since Studebaker's employee pension plan was Page 807 under-funded, over 6,900 employees lost pension benefits.31 Public uproar over the debacle motivated Congress to act.32
Congress began searching for an improved means of regulating, administering, and enforcing private pension plans.33 Although the WPPDA imposed certain reporting requirements, a more comprehensive regulatory scheme was needed.34 Congress sought to address a number of concerns within the private pension system.35 These concerns included: regulating vesting requirements, ensuring adequate funding of plans, providing a reinsurance program to protect workers, creating a system whereby benefits were portable to other plans, and imposing certain fiduciary responsibilities and disclosure requirements on plan administrators.36 The WPPDA was premised on the notion that by requiring basic reporting and disclosure of raw information to plan participants, those participants could bring their own enforcement actions against plan administrators.37 That notion failed.38 Congress, when it began drafting ERISA, sought to expand both the scope and detail of reporting and disclosure requirements.39 Plan administrators would be required to furnish information in substantial detail.40 Participants would be fully apprised as to exactly what benefits the participant was entitled, what procedures were required to obtain those benefits, what circumstances might prevent receipt of benefits, and how benefit funds were invested and managed.41 In addition, the information would be "written in a manner calculated to be understood by the average plan participant."42 A participant's rights would be safe only "if fiduciaries are aware that the details of their dealings will be open to inspection, and that individual participants and beneficiaries will be armed with enough information to enforce their own rights as well as the obligations owed by the fiduciary to the plan in general."43
After nearly ten years of drafting and debate, ERISA became law in 1974.44 The purpose of ERISA is to regulate the "establishment, operation, and administration of two types of employee benefit plans."45