Sixth Circuit Revives Lawsuit Against Detroit Edison Co.
ERISA Section 102 requires employers to provide accurate and comprehensive information about plan benefits to participants through a summary plan description (and its updates). A group of participants in Detroit Edison’s defined benefit plan sued alleging that the employer failed to accurately describe the consequences of a switch from a traditional defined benefit plan to a cash balance plan.
Just recently, the Sixth Circuit held that the case could go forward, reversing the district court’s dismissal of the claim. The Court ruled that the summary plan description’s discussion of the consequences of switching from the defined benefit plan to the new cash balance plan was overly complicated and erroneously gave the impression that the benefits of participants who switched to the cash balance plan would “inevitably increases.”
The case now returns to the trial court for further proceedings—including whether a putative class based upon these alleged misrepresentations can in fact be properly certified as a class action.