On June 7, 2022, the Second Circuit decided McQuillin v. Hartford Life and Accident Insurance Co., No. 21-1514, holding that under ERISA and Department of Labor (DOL) regulations governing administrative benefit claims and appeals (29 C.F.R. § 2560.503-1), when considering an appeal of a denied disability claim, a plan administrator must make full determination of benefits. In doing so, the Second Circuit rejected the claim administrator’s argument that reversing the claim denial and remanding the claim internally for reevaluation satisfied the regulations — instead, a decision on whether or not benefits would be awarded was required.
In its February 26, 2020, unanimous decision in Intel Corporation Investment Policy Committee v. Sulyma, the United States Supreme Court resolved a circuit split regarding what constitutes “actual knowledge” for purposes of triggering ERISA’s three-year statute of limitations for fiduciary breach claims. (ERISA § 413(2); 29 U.S.C. § 1113(2)). The Court found that a fiduciary’s act of disclosing investment information is necessary, but not sufficient to demonstrate that a participant has actual knowledge of the information contained in investment disclosures. Simply put, to “meet § 1113(2)’s ‘actual knowledge’ requirement … the plaintiff must in fact have become aware of that information.”
Under ERISA, a plaintiff must file a lawsuit within six years of the alleged fiduciary breach, or within three years of the date the plaintiff had “actual knowledge” of the breach. (ERISA § 413; 29 U.S.C. § 1113). Sulyma filed his lawsuit challenging the prudence of the Intel 401(k) plan fiduciaries’ investment decisions more than three years, but less than six years, after Intel provided ERISA-mandated disclosures of the investments at issue.