Thompson v. Retirement Plan for SC Johnson

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A 1998 amendment to the plan effectively penalized lump-sum distributees by voiding their future interest credits, in violation of ERISA, 29 U.S.C. 1054(c)(3). Participants who had received lump sum distributions filed suit in 2007. The district court held that the claims accrued when the plaintiffs received their distributions and that some claims were barred by the six-year state limitations period. The court ordered recalculation of the distributions for the other plaintiffs using a modified version of a method proposed by defendants. The Seventh Circuit reversed in part. The distributions were the final step of a clear repudiation of the participants’ entitlement to anything different and triggered the running of the limitations period; prior communications about the amendment were simply "hints." The plan fiduciaries were not entitled to deference with respect to the recalculation of benefits; the district court must determine how to calculate awards. View "Thompson v. Retirement Plan for SC Johnson" on Justia Law