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THE FIDUCIARY CORNER: Information Requests Should Be Honored–Promptly

Ignoring a participant’s request for copies of plan documents and SPDs is never a good idea. It is even less so when the participant has already filed a lawsuit against the plan sponsor or its fiduciaries, and when the letter comes from the participant’s attorney. A federal judge in Tennessee imparted this lesson to Nissan North America, Inc. in a decision earlier this year.

A participant in Nissan’s long-term disability plan filed suit to recover benefits. In the context of that lawsuit her attorney sent four letters to Nissan asking for plan documents. Nissan waited more than a year to provide them, suggesting that it was not aware of the requests because they were addressed only to “Nissan,” rather than to “Plan Administrator, Nissan North America Inc.”

Plan administrators are obligated under ERISA to provide copies of certain documents within 30 days after a participant or beneficiary (or his or her representative) requests them. Failing to comply with this requirement may subject the administrator to a penalty of up to $110 per day for each document that is not provided. This penalty, which is discretionary on the part of the court, is assessed against the plan administrator personally, and awarded to the requesting participant or beneficiary.

In Nissan’s case, the court found the participant’s requests for documents sufficiently specific to trigger the disclosure obligation. And although the court ruled against the participant on the substance of her claim for disability benefits, it awarded her $28,650 in penalties from Nissan for its failure to provide the requested documents.