On June 14, 2021, the Department of Labor (DOL) issued an information letter stating that plan fiduciaries have a duty under ERISA’s claim regulations to produce upon request recordings or transcripts of phone calls between benefit claimants and plan representatives regarding their benefit claims. The DOL letter is a call for plan administrators to revisit and potentially refine their processes for recording and storing such conversations.
Claims-related audio recordings may need to be disclosed to claimants upon request, according to an information letter dated June 14, 2021 (“Information Letter”), issued by the Department of Labor’s (“DOL”) Employee Benefits Security Administration (“EBSA”). Although DOL information letters are not binding, as a result of the Information Letter, claimants may start to request audio recordings of conversations relating to benefit denials. Plan sponsors and claims administrators should be prepared for these requests and should train personnel handling telephone calls with claimants accordingly.
The Information Letter addresses whether ERISA and DOL claims procedures regulations thereunder require a plan fiduciary to provide, upon a claimant’s request, a copy of an audio recording and transcript of a telephone conversation between the claimant and a representative of the plan’s insurer regarding a benefit denial. The request at issue in the Information Letter was denied by the claims administrator on the basis that “recordings are for ‘quality assurance purposes,’” and “are not created, maintained, or relied upon for claim administration purposes, and therefore are not part of the administrative record.” The claims administrator maintained that the actual recording is distinct from the notes made available to the claimant, which contemporaneously documented the content of the recorded conversation, and which became part of the “claim activity history through which [the insurer] develops, tracks and administers the claim.”
President Biden signed an executive order on May 20 on climate-related financial risk that seeks to change the rules regarding the use of environmental, social, and governance (ESG) investments in retirement plans. The order specifically directs the Employee Benefits Security Administration (EBSA) bureau of the Department of Labor (DOL) to consider suspending, revising, or rescinding the Trump-era “Financial Factors in Selective Plan Investments” rule regarding ESG retirement investments. The executive order is consistent with the expectation that the Biden administration will move to encourage the consideration of ESG factors when selecting retirement plan investments given the emphasis on climate change initiatives.
On March 10, 2021, the Department of Labor’s Employee Benefits Security Administration (EBSA), the agency charged with interpreting and enforcing ERISA, announced that it will not enforce the Trump-era “Financial Factors in Selecting Plan Investments” rule, which has been perceived as potentially discouraging retirement plan fiduciaries from selecting investment alternatives which emphasize environmental, social, and governance factors (commonly referred to as “ESG investments”).
The rule, which was finalized in November 2020 and technically became effective on January 12, 2021, does not prohibit ESG investments. However, it has been widely criticized as fostering a misapprehension that ESG investments may be subjected to a higher degree of fiduciary scrutiny than others. Following the election, EBSA’s announcement of its non-enforcement policy comes as no surprise, as the Biden administration had already identified the rule on its “List of Agency Actions for Review.”
On January 12, 2021, the Department of Labor (“DOL”) issued guidance that is intended to help retirement plan fiduciaries meet their ERISA obligations to locate and distribute benefits to missing or nonresponsive participants.