A Cautionary Tale For Administrators Who Neglect Employee Benefit Plan Terms

Individuals responsible for 401(k) retirement or welfare plan decisions know that the plan document is the first place to look for guidance when deciding a difficult administration question, such as whether a participant is entitled to a benefit. A recent 6^th Circuit Court of Appeals case, Laake v. Benefits Committee, Western & Southern Financial Group Company Flexible Benefits Plan, Case No. 22-3182 (6th Cir. 2023), provides a cautionary tale for administrators who fail to observe that basic rule.

The Court in Laake upheld the lower Court's finding that the Benefits Department did not have discretionary authority to resolve the employee's benefits claim. The Western & Southern plan document granted the Benefits Committee, as opposed to the Benefit Department, the authority to administer the plan and determine benefits. While the plan permitted the Benefits Department to "assist" the Committee, the Court found that the term "assist" aligns more closely with the