SPD trumps plan document.The Fourth Circuit recently reiterated its view that representations in a summary plan description (SPD (Serial Presence Detect) The method used by DIMM memory modules to communicate their capacity and features to the computer. Data such as manufacturer, size, speed, voltage and row and column addresses are stored in an EEPROM chip on the module. ) control over inconsistent provisions in an official plan document (Aiken v. Policy Management Systems Corp., 4th Cir., 1993). Plan sponsors should be concerned about this case because it reflects the views of at least five other circuits, and because the court maintained its position even though the plan, as with most plans, contained language stating that the plan document would control. In Aiken, an employee accused of sexual harassment sexual harassment, in law, verbal or physical behavior of a sexual nature, aimed at a particular person or group of people, especially in the workplace or in academic or other institutional settings, that is actionable, as in tort or under equal-opportunity statutes. was offered the choice of resigning or being fired. The employee opted for resignation "under protest." The employee claimed that he resigned in part because he believed he would be immediately eligible for his retirement benefits. He based his claim for benefits on the SPD, which on its face indicated that he was entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: to a lump-sum distribution Lump-Sum Distribution A one time payment for the entire amount due, rather than breaking payments into smaller installments. Some lump-sum distributions receive special tax treatment. of his vested benefits vested benefits Pension benefits that belong to an employee independent of his or her future employment. An employee usually becomes vested after five years of employment with the same firm, although there are numerous exceptions requiring longer employment. . The employer, Policy Management Systems (PMSC PMSC Policy Management Systems Corporation PMSC Political Military Steering Committee PMSC Peterborough Motor Sports Club PMSC Professional Media Service Corporation PMSC Private Military and Security Company PMSC Pilipinong Migrante Sa Canada ), denied his claim because the terms of the plan itself did not provide for such a distribution. On cross-motions for summary judgment, the district court concluded that the terms of the plan controlled over those of the SPD and dismissed the employee's claim. It alternatively found that even if the SPD controlled, the employee was not entitled to recover; he had failed to demonstrate reliance on the SPD or any resulting prejudice. In effect, the court of appeals overruled the district court on both issues, ruling that the case was not ripe for summary judgment. The specific provision in the SPD on which the employee based his claim stated, "...if a participant terminates employment after completing 20 years of service but before attaining age 60, the participant is entitled to distribution of the vested interest Vested Interest A financial or personal stake one entity has in an asset, security, or transaction. Notes: For example, if you have a mortgage, your bank has a vested interest on the sale of your house. See also: Right in the Plan." At the time of his resignation, the employee was not yet 60 years of age and had served with PMSC for more than 20 years. Reversing the district court, the Fourth Circuit stated that "under controlling precedent in this Circuit, representations in a SPD control over inconsistent provisions in an official plan document." The court cited its decision in Pierce Pierce may refer to: Places
The court then went on to list the following cases and circuits in accord with this view: Heidgerd v. Olin Corp., 906 F2d 903 (2d Cir. 1990); Hansen v. Continental Insurance Co., 940 F2d 971 (5th |
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