A worker claimed that, because his employer under-reported his earnings to his pension fund, he did not get the pension benefits to which he was entitled. Initially, the U.S. Second Circuit Court of Appeals confirmed that Central States does not specifically require continuing audits of the employer, so long as some affirmative attempt (in this case a series of random audits) is made to ensure that the plan is getting the contributions to which it is entitled. The court then turned to the plaintiff’s argument that the plan should have provided adequate notice that he would be required to produce his employment records in order to claim additional benefits, rather than relying on the reporting of the employer or other efforts made by the plan trustees. First, the court rejected application of the “arbitrary and capricious” standard, as no interpretation of the Plan was required. Next, the court rejected the argument that relief for the alleged breach was not available under Section 502(a)(3), concluding that such a claim could be asserted under 502(a)(1)(B). Finally, reviewing the SPD de novo, the court concluded that it did not comply with the statutory and regulatory requirements of ERISA, and remanded the case for a determination of whether there was “likely prejudice” to the plaintiff as a result of the deficient SPD. In conclusion: “ERISA’s fiduciary duties do not bar pension benefit plans from requiring their participants to bear the burden of proving that they are owed additional benefits. But if funds intend to have participants shoulder this burden, and if the chance that their own records are inaccurate is more than an ‘idiosyncratic contingency,’ then the funds must give notice of this intent in their SPDs.” Wilkins v. Mason Tenders Dist. Council, 445 F.3d 572 (2nd Cir. 2006).
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