By Susan P. Serota, Frederick A. Brodie, David R.Lagasse and Mary K. Tomback
No company’s benefits department is perfect – and some fall far short of the ideal. As a result, oversights and errors in the compilation and distribution of summary plan descriptions (SPDs) required under the Employee Retirement Income Security Act of 1974 as amended (ERISA) crop up with fair frequency. These mistakes may result in employees foregoing available benefits or making other ill-advised choices, which ultimately give rise to litigation.
When faced with plan sponsors’ errors in creating or distributing SPDs, courts have at times proven unforgiving. Last year, resolving confusion among the Circuit’s lower courts, the U.S. Court of Appeals for the Second Circuit "squarely decided" that, to recover plan benefits based on a deficient SPD, a plaintiff must demonstrate that she was "prejudiced." Burke v. Kodak Retirement Income Plan, 336 F.3d 103 (2d Cir. Jul. 17, 2003). With that decision, the Second
