The Miller & Chevalier ERISA and Employee Benefits practices held an invitation-only teleconference to review the changes to ERISA retirement and welfare plans that employers should consider in light of the recent Supreme Court decision in MetLife v. Glenn. In the June 19 decision, the Court affirmed the Sixth Circuit Court of Appeals’ decision in favor of Glenn and held that if an administrator or fiduciary having discretionary authority is operating under a conflict of interest, that conflict must be weighed as a factor in determining whether there has been an abuse of discretion. The Court explained that there is a conflict of interest where it is the employer itself that both funds the plan and evaluates the claim, and a conflict also exists where the plan administrator is an insurance company. However, the Court remarked that administrators can minimize any loss of deference (“perhaps to the vanishing point”) by establishing structures designed to separate plan decision makers from those concerned with finances or by imposing management checks that penalize inaccurate decision-making irrespective of whom the inaccuracy benefits. Thus, for employers and insurers going forward, the most important aspect of its decision is the guidance for setting up internal safeguards for accurate decision-making free from actual conflicts, which should preserve the right to a robustly deferential review.
During the call an overview of the case was provided as well as a discussion of how this decision is likely to affect future ERISA litigation, and action steps employers should consider to protect the decision-making deference provided to their retirement and welfare plan administrators. For a brief summary of the MetLife v. Glenn decision, please see the June 19th issue of Miller & Chevalier’s Focus On Employee Benefits newsletter.