590E-SYLLABUS-SPRING-2018 1.0.pdf

This dilemma by suggesting that courts use discretion

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this dilemma by suggesting that courts use discretion and not award damages if the employee's claim for benefits was not colorable or if the employer did not act in bad faith. There is, however, a more fundamental problem with the Court of Appeals' interpretation of the term “participant”: it strays far from the statutory language. Congress did not say that all “claimants” could receive information about benefit plans. To say that a “participant” is any person who claims to be one begs the question of who is a “participant” and renders the definition set forth in § 1002(7) superfluous. Indeed, respondents admitted at oral argument that “the words point against [them].” Tr. of Oral Arg. 40. In our view, the term “participant” is naturally read to mean either “employees in, or reasonably expected to be in, currently covered employment,” Saladino v. I.L.G.W.U. National Retirement Fund, 754 F.2d 473, 476 (CA2 1985) , or former employees who “have ... a reasonable expectation of returning to covered employment” or who have “a colorable claim” to vested benefits, Kuntz v. Reese, 785 F.2d 1410, 1411 (CA9) (per curiam), cert. denied, 479 U.S. 916, 107 S.Ct. 318, 93 L.Ed.2d 291 (1986) . In order to establish that he or she “may become eligible” for benefits, a claimant must have a colorable claim that (1) he or she will prevail in a suit for benefits, or that (2) eligibility requirements will be fulfilled in the future. “This view attributes conventional meanings to the statutory language since all employees in covered employment and former employees with a colorable claim to vested benefits ‘may become eligible.’ A former employee who has neither a reasonable expectation of returning to covered employment nor a colorable claim to vested benefits, however, simply does not fit within the
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Spring 2017 LER 590-E: GOVERNMENT REGULATION II 106 | P a g e [phrase] ‘may become eligible.’ ” Saladino v. I.L.G.W.U. National Retirement Fund, supra, at 476. We do not think Congress' purpose in enacting the ERISA disclosure provisions-ensuring that “the individual participant knows exactly where he stands with respect to the plan,” H.R.Rep. No. 93-533, p. 11 (1973), U.S.Code Cong. & Admin.News 1978, p. 4649-will be thwarted by a natural reading of the term “participant.” Faced with the possibility of $100 a day in penalties under § 1132(c)(1)(B) , a rational plan administrator or fiduciary would likely opt to provide a claimant with the information requested if there is any doubt as to whether the claimant is a “participant,” especially when the reasonable costs of producing the information can be recovered. See 29 CFR § 2520.104b-30(b) (1987) (the “charge assessed by the plan administrator to cover the costs of furnishing documents is reasonable if it is equal to the actual cost per page to the plan for the least expensive means of acceptable reproduction, but in no event may such charge exceed 25 cents per page”).
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