Good morning, ERISA Watchers! Last week was quite a busy week with notable Circuit Court decisions. In Hager v. DBG Partners, Inc., No. 17-11147, __F.3d__, 2018 WL 4258968 (5th Cir. Sept. 6, 2018), the court addressed an issue of first impression for the Fifth Circuit concerning the availability of a remedy for a COBRA notice violation. The court determined that payment of all medical expenses is compensatory damages which is not available under ERISA Section 502(a)(3). But, a penalty is available under Section 502(c)(1) and the court could “discern no barrier to the court awarding the amount of [the participant’s] medical expenses as a penalty.” The court remanded the case to the district court to determine whether to award a penalty and the amount of such penalty.
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Pension Plan Participants Cannot Seek Disgorgement of Post-Termination Investment Gains Resulting from PBGC’s Alleged Fiduciary Breach
Today’s notable decision is the D.C. Circuit decision in Lewis, et al. v. Pension Benefit Guaranty Corporation, No. 17-5068, __F.3d__, 2018 WL 4000484 (D.C. Cir. Aug. 21, 2018).
The gist is that Delta and the PBGC agreed to terminate the Delta Pilots Retirement Plan (“the Plan”) because the Plan had insufficient assets to support the retirement benefits promised to the pilots. The PBGC became the statutory trustee to collect the Plan’s remaining assets and make the promised payments according to a list of statutory priorities. Unfortunately, it took six years for the Corporation to finish making final benefit determinations. The pilots claim that the PBGC breached its fiduciary duties in a number of ways which enabled it to control Plan assets for a longer period and collect massive investment returns.
Continue Reading Pension Plan Participants Cannot Seek Disgorgement of Post-Termination Investment Gains Resulting from PBGC’s Alleged Fiduciary Breach