Mr. Earl Bryant, a retired VP of Human Resources for General Electric has recently learned a hard lesson from a federal court in Georgia.
His former employer, which is the plan administrator, can state misleading information in a summary plan description, as long as the plan document makes clear the truth of the matter. When retiring, Mr. Bryant was told “employee/dependent medical plan, employee dependent life insurance plan, pension, retirement, retiree reimbursement account, pharmacy assistance fund, and death benefits” would continue indefinitely. The court noted “retiree health insurance plans are considered welfare benefit plans under ERISA,” so unless the plan document stated that they were vested and permanent they could be snatched away on a whim. So isn't the summary plan description a plan document?
Not really. The court explained that as to the summary plan description, their statements do not themselves constitute the terms of the plan for purposes of an ERISA benefit claim. As long as the real plan reserves the right to amend the plan, then the promise of indefinite benefits was meaningless. So, since the plan had that reservation, those benefits Mr. Bryant was counting on may be taken away.
Sort of reminds me of the Paul Simon song with a slight modification:
“[My employer] only knows
[My employer] makes his plan
The information's unavailable
To the mortal man
We work our jobs
Collect our pay
Believe we're gliding down the highway
When in fact we're slip slidin' away…”
Before you retire, it is a good idea to contact one of our experienced ERISA attorneys for a review of your plan documents, so you have a better understanding of what you can really count on.