Washington D.C. Benefits Law Blog

You need coverage for specific costs and decide to file a claim through the Employee Retirement Income Security Act of 1974 (ERISA). How long is it going to take to get that claim reviewed? You're worried that you'll be kept waiting for weeks or even months with no resolution.

The good news is that specific time limits have already been established by ERISA, so you can find out roughly how long it will take, giving you a window of time in which you can expect results. There are three different categories with their own limits, which are as follows:

• An urgent care claim. These claims should always get addressed within 72 hours, as technically, officials are supposed to do it as soon as possible.
• A pre-service claim. Though perhaps not as urgent as the above, this is still before the service is provided and so it makes sense that you want to know relatively quickly. Therefore, it should not take more than 15 days. The government notes that they strive to do it "within a reasonable time period," so it could happen far faster than that.
• A post-service claim. The goal for officials here is twice as long as the above, giving them a maximum range of 30 days. Again, they should review all claims within a reasonable time period.

A major employer in Washington, D.C., and around the country, Salesforce is facing an ERISA lawsuit over claims that it did not properly handle its retirement program. Specifically, the plan administrators are accused of breaching their fiduciary duty to plan members and beneficiaries. Salesforce, its board of directors and its investment committee are all named as defendants in the suit, which alleges that the company failed to save the assets of its plan members by opting for lower-fee investment management options. The large retirement plan had over $2 billion in assets in 2018, which the plaintiffs say gives it significant leverage in negotiating a better deal.

They say that Salesforce, in violation of its ERISA obligations, failed to reduce plan expenses or use its judgment to determine which investment options would best reflect the interests of plan participants and beneficiaries. The plan invests in a number of mutual funds, but the plaintiffs say that Salesforce did not take advantage of lower-cost share classes, causing the fund as a whole to lose out on income over the years. They also said that the investment committee did not consider alternative options that would provide significant savings.

D.C. residents who have corporate pensions should take note of a recent spate of lawsuits against companies who have allegedly breached their fiduciary duties by underpaying joint and survivor annuity benefits (JSA). Recently, there was a lawsuit filed against UPS which was the latest suit to claim that a company effectively shortchanged those who elected to take their pensions as a joint and survivor annuity as opposed to a single life annuity (SLA).

Retirees have the option to take their pension as a JSA so that their beneficiaries can continue to receive their pension after they die. A JSA is a lower amount than an SLA. Companies cannot simply choose any percentage that they want for a JSA. Instead, it must be the actuarial equivalent of an SLA.

A major defense contractor with employees in Washington, D.C., and across the country is settling a class action suit linked to its retirement plan. Members of Northrop Grumman's 401(k) plan brought a lawsuit under the Employee Retirement Income Security Act (ERISA), a law that protects employee benefits from misuse, mismanagement or violation of fiduciary duties. Members of the plan said that the participants' assets were placed at risk by management decisions, including charging excessive fees and overpaying for plan administration.

The case began in 2006 with allegations that Northrop Grumman's retirement plan was paying excessive fees, wasting employees' retirement funds. While this suit was settled for $16,750,000, it only addressed the issue of excessive charges prior to May 11, 2019. However, they brought a new lawsuit in 2016, saying that they continued to pay excessive fees and that their plan holdings were put at risk by the company's investment choices. However, by August 2019, the case continued with one remaining claim, that the defense contractor violated its duties to plan participants by choosing active management for one of its funds, which is more expensive than a passive management style. By 2014, the company had shifted to passive management for all of its 401(k) plans.