CIGNA v. Amara Keeps Surprises Coming

For employees in Chicago, your rights under ERISA continue to change as a result of the Supreme Court’s recent decision in CIGNA v. Amara. As discussed in an earlier post, ERISA § 502(a)(1)(B) cannot be used to claim benefits due but for a breach of fiduciary duty where the plan administrator made a misrepresentation about the plan by failing to disclose a material term in the summary plan description (SPD). The Supreme Court made up for it, though, by expanding the scope of relief under § 502(a)(3), permitting participants to seek reformation of the plan to match what the administrator told participants, or to even recover monetary compensation from the administrator under the “surcharge” theory that has the ERISA community buzzing.

One week after its opinion, the Court overturned another portion of the lower court’s ruling, one that denied the employees’ request to reinstate the pension plan because CIGNA did not disclose key negative elements of its adopted cash balance plan. Now, in addition to following the Court’s guidance on fashioning a remedy under § 502(a)(3) pursuant to the Court’s May 16th opinion, the lower court will also determine on remand whether that section allows the employees to be reinstated in the previous plan where CIGNA did not comply with an ERISA requirement to disclose all “significant reductions in benefit accruals.” ERISA § 204(h).

Essentially, all eyes will be on the lower court in Amara to see how these multiple remedies determinations pan out. If you have experienced any recent changes to your pension plan and believe that you have not been properly notified of the changes, speak with an attorney knowledgeable in ERISA.