Conflicts Between the Plan Documents and The SPD
Washington v. Murphy Oil, ___ F.3d ___, 2007 U.S. App. LEXIS 19546 (5th Cir. 2007), decided last week by the U.S. Court of Appeals for the Fifth Circuit, has received a number of comments from legal bloggers. See, for example, here and here. With good reason.
The case squarely deals with what happens when there is a conflict between the Summary Plan Description (“SPD”) and the governing plan documents that establish an ERISA plan and that form the source for the SPD. It is a bit surprising to me how often there are discrepancies between the governing plan documents and SPDs. Washington resolves the issue about what happens in that situation by holding that where there is a direct conflict between the documents, the employee gets the benefit of more generous SPD terms without any need to prove either that they relied on or were prejudiced by the discrepancy. Washington also provides a helpful survey of the other Circuits that have weighed in on the issue.
In Washington, the SPD was more favorable to the employee than the governing plan documents. But what happens when the governing plan documents are more generous to the employee than the SPD? Couldn’t the employee argue that she is entitled to the more generous benefits based on the plan documents? In that case, it can’t be said that the SPD is an accurate or valid summary of the governing plan documents at all.
The U.S. Court of Appeals for the Ninth Circuit addressed this specific issue in Bergt v. Retirement Plan for Pilots Employed by Mark Air, Inc., 293 F.3d 1139 (9th Cir. 2002). The court in Bergt holds that the employee was entitled to the benefit of the more generous of the two documents whenever there is a conflict between the governing plan instruments and the SPD.