July 20, 2019

Tenth Circuit: Failure to Provide Sufficient ERISA Notice Not Egregious

The Tenth Circuit Court of Appeals published its opinion in Jensen v. Solvay Chems., Inc. on Tuesday, July 2, 2013.

Solvay Chemicals changed how it provided retirement benefits by converting its defined benefit plan into a so-called “cash balance” plan that in essence required only a defined contribution from the company. This change eliminated early retirement subsidies.

ERISA required, under § 204(h), that Solvay provide employees with detailed notice of the changes to the plan. In a prior appeal, the Tenth Circuit held Solvay’s notice was sufficient except for describing the preexisting the company’s preexisting early retirement subsidies. The court remanded for a determination of what, if any, relief was appropriate for this violation.

The employees sought return of their early retirement benefits as a remedy for the defective notice. This was not an available remedy unless Solvay’s failure was egregious. The Tenth Circuit affirmed the district court’s decision that Solvay’s failure did not qualify as egregious under 29 U.S.C. § 1054(h)(6)(A) and also held the employees were not eligible for any other form of equitable relief.

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