v. Nationwide Life Insurance Company, the Sixth Circuit
Court of Appeals ruled that a "clear notice" standard
applies when determining whether a plan administrator should be
subject to statutory penalties for failing to timely furnish plan
documents requested by a participant. The Sixth Circuit reasoned that
the clear-notice standard strikes a fair balance between a
participant's right to timely receive plan documents and the
statutory penalties facing plan administrators that fail to timely
furnish plan documents requested by a participant.
Applicable Law. ERISA requires plan administrators to provide, upon
receiving written request from a participant, copies of the latest
summary plan description, summary annual report, any terminal report,
the bargaining agreement, trust agreement, contract, or other
instrument used to operate the plan. A plan administrator that fails
to furnish such documents within 30 days after a participant's
request faces penalties of up to $110 per day for each day past the
30-day response time.
Background. In Cultrona,
the plaintiff filed a lawsuit against the defendant after it denied
her claim under an accidental death plan for which it was plan
administrator. During the appeal process, the plaintiff's counsel
requested that the defendant, as plan administrator, provide all
documents it had reviewed in reaching the decision to deny the claim.
The defendant provided some of the requested documents
but failed to provide a copy of the actual accidental death policy
until seven months after the plaintiff's request. Consequently, the
district court awarded the plaintiff $8,910 in statutory penalties (i.e.,
$55/day) because of the delay. The defendant appealed this penalty
assessment to the Sixth Circuit.
Sixth Circuit's Decision. The defendant argued that the penalty was not
warranted because the plaintiff did not specifically request the
policy. It further asserted that the "clear-notice"
standard should be applied, thereby requiring participants to provide
clear notice to the plan administrator of the information being
The Sixth Circuit agreed that the
"clear-notice" standard should apply, but found that the
defendant should have known that the plaintiff was requesting a copy
of the policy. Since it was clear that the policy was part of the
defendant's review process, the Sixth Circuit found that the
plaintiff had clearly requested it. Accordingly, the Sixth Circuit
upheld the lower court's decision to award statutory penalties.
Impact of Cultrona. As evidenced by Cultrona,
the "clear-notice" standard can be difficult to interpret.
Plan administrators should be cognizant that ERISA clearly favors the
production of documents when requested, and recognize that even a
poorly worded request can serve as the basis for the assessment of
When responding to participants' document requests, plan
administrators are advised to provide what is requested, and possibly
more. Plan administrators that have questions about how best to
respond to a participant's document request are advised to consult
with qualified benefits professionals.