HR’s Oral Representations Trump Summary Plan Description — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

HR’s Oral Representations Trump Summary Plan Description

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HR talks to employees all the time. Beware of what you say regarding retiree health benefits, because such talk could be considered a fiduciary act. If HR is considered a fiduciary and materially misrepresents benefits, the company may be bound to a promise to pay it never intended to make, maybe for years to come. The summary plan description (SPD) doesn't necessarily trump those oral misrepresentations.


Case in point: In meetings hosted by HR, employees were informed that if they retired before a certain date, they would, essentially, receive affordable health benefits for life. Notwithstanding these statements, the company reserved the right to change its retiree health benefits plan. While HR knew about this reserve clause, it never came up in the meetings. The reserve clause was included in an SPD, which retirees customarily received when enrolled in the retiree health benefits plan. It was clear from the...(register to read more)

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