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CIGNA Corp. v. Amara

Civil enforcement by participants under the Employee Retirement Income Security Act of 1974, as amended (ERISA) generally has been construed narrowly, but language in a recent U.S. Supreme Court case suggests that participants now may be entitled to a broader range of relief when a participant wins an ERISA lawsuit. While the Court has clarified that a summary plan description (SPD) is not a formal plan document, the opinion indicates that participants who can show “actual harm” from faulty benefit plan-related communications may be entitled to more relief under ERISA than previously was thought.

In CIGNA Corp. v. Amara, the plaintiffs brought a class action lawsuit challenging allegedly misleading communications (including the SPD) about their employer’s conversion of its traditional defined benefit pension plan (under which plaintiffs had accrued a monthly benefit following retirement based upon compensation and years of service) into a cash balance plan (under which plaintiffs would accrue a hypothetical “account balance” based upon annual “contributions” and interest credits). Plaintiffs alleged that CIGNA Corp. failed to give them adequate notice of the reduction of their rate of benefit accruals, instead furnishing communications and a faulty SPD that misled them regarding the actual benefits they would accrue. The Supreme Court agreed to review the case to determine whether participants would need to show that they “detrimentally relied” on the faulty communications and SPD or needed to show only that they likely were harmed by the communications in order to be entitled to relief, but the Court’s majority opinion, in a surprise to practitioners, went on to address the scope of available ERISA equitable relief.

Many courts had enforced the terms of a faulty SPD against the plan sponsor, instead of the governing plan document, if the terms of the faulty SPD were more favorable to participants. Repudiating this rule, the Supreme Court has clarified that an SPD is not a governing plan document and that “reformation” of a plan document to make it consistent with a faulty SPD is not an available form of relief in an action to enforce the terms of a plan document. The Court then remanded the case to the District Court to determine whether the participants were entitled to any “equitable relief” under ERISA and went on to list a host of possible equitable remedies, including equitable estoppel, reformation and surcharge (essentially, monetary damages). The opinion signals a move away from the Court’s more narrow construction of “other appropriate equitable relief” in its prior Mertens, Knudson and Sereboff decisions.

Given the increased litigation risks after Amara, plan sponsors are encouraged to do the following:

  • Work with counsel to ensure that all benefit plan communications correctly reflect the terms of governing plan documents;
  • Ensure that communications of any “bad news” (e.g., benefit reductions, plan limitations or exclusions, or any other potential participant pitfalls) are clear, direct and not misleading – don’t hide the ball;
  • Develop human resources/benefits management procedures to ensure the quality and accuracy of benefit plan-related communications and responses to participant inquiries;
  • Review service agreements with third-party administrators, fiduciaries or service providers that directly communicate with plan participant to make sure that liability (and indemnity obligations) properly are allocated among the parties and that any employer exposure is understood; and
  • Obtain or review plan fiduciary insurance coverage and ensure its adequacy.

If you have questions about the Amara decision or its implications or need assistance reviewing benefit plan SPDs or other communications, please contact one of the following attorneys who belong to the Employee Benefits and ERISA Controversy Teams at Greenebaum Doll & McDonald PLLC:

Mary G. Eaves


Benjamin J. Evans


V. Brandon McGrath    


Peter L. Thurman


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About Greenebaum Doll & McDonald PLLC
Greenebaum Doll & McDonald PLLC is a widely-respected business law firm with approximately 150 professionals in five offices, serving local, national and international clients in virtually every industry. 

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  • Partner

    Ben concentrates his practice in employee benefits law, including qualified retirement plans, employee welfare benefit plans, nonqualified deferred compensation arrangements, COBRA, and ERISA-related litigation. Ben also ...



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