ERISA Experts Evaluate Termination of Retiree Life Insurance Benefit


Insurance Expert WitnessThis case involves tens of thousands of retirees from a large company who were promised life-time life-insurance coverage through their employer in Mississippi. Despite these assurances, the company canceled this life insurance benefit for all retirees. Shortly before the cancellation took place, the company brought on new executive management that promised to cut millions of dollars in expenses, and to increase the stock price of the company back to previous highs through an extensive cost reduction program. As a component of this initiative, the company then brought in outside consultants to research whether or not cutting this insurance benefit was a viable option. It was alleged that this cancellation of retirement benefits was in breach of fiduciary duty owed to the company’s employees and retirees.

Question(s) For Expert Witness

  • 1. Are you able to discuss if their was a breach in fiduciary duty by the employer?
  • 2. Are you able to discuss the role private consultants play in employee benefits?

Expert Witness Response E-083872

I am generally knowledgeable about employee benefits and the federal statute (ERISA) that regulates them. I have been a consultant to the Pension Rights Center, the AARP, and the GAO and have been hired by such companies as Toyota and Fidelity to provide assistance on employee benefits matters, although my usual consultations are for organizations and attorneys representing participants in employee benefit plans. If there is a case here, it would be because the insurance benefits were a benefit at retirement and the plan was a retirement plan. A retirement plan has to have certain protections, including vesting. The decision to end the plan was probably not a decision made in a fiduciary capacity. I have been an expert witness in a case that involved the promise of certain continuing benefits at retirement before.

Expert Witness Response E-083971

I have considerable experience in the Life & Health fields and in dealing with numerous types regulatory compliance issues, including ERISA. I have many years of experience working on employee benefit packages and ensuring their compliance with ERISA and other applicable state and federal laws. In particular, I advised on ERISA compliance in our ASO business during my tenure at a major health insurance provider. While at my previous position, I was in charge of working with our outside consultants who were brought in by the managing physicians to ensure compliance with ERISA for our employee benefit package and executive compensation.

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