A recent decision by a federal judge in New York underscores the need for employers and other administrators of benefit plans regulated by the Employee Retirement Income Security Act (ERISA) of 1974 to distribute summary plan descriptions (SPD) and confirm receipt by participants in a timely fashion.

The plaintiff in Simeon v. The Mount Sinai Medical Center, et al., 00 Civ. 5703 (S.D.N.Y. July 2001) (JGK), is a psychiatrist employed by Mount Sinai Medical School. Upon commencement of her employment, Simeon was eligible to participate in Mount Sinai's tax sheltered annuity plan, regulated by ERISA. Mount Sinai, as the plan's administrator and fiduciary for the plan's participants, claimed to have mailed a certified letter to Simeon shortly after her hire, informing her of the need to enroll in the plan to be eligible for plan benefits.

Simeon sued under ERISA, claiming that Mount Sinai breached its fiduciary duty by failing to give her proper notice of the plan. Specifically, Simeon did not receive a copy of the SPD within ninety days after she became eligible to join the plan.

The federal district judge held that the certified letter allegedly sent to Simeon did not satisfy Mount Sinai's ERISA obligation, stating, "ERISA not only requires that notice be reasonably calculated to reach the participant but also requires that the participant receive a copy of the summary plan description. The failure to provide participants with a Plan description in violation of a statutory obligation can support a breach of fiduciary duty claim." The court further held that the failure to provide a summary plan description was not simply a "technical violation" of ERISA.

This decision stresses the importance for ERISA plan administrators to not only prepare and distribute summary plan descriptions but also to be certain that each ERISA plan participant receives a copy of the description in a timely fashion.

If you have questions regarding the issues raised in this alert, please contact the Harris Beach attorney with whom you usually work or Israel Kornstein at (212) 687-0100.

This legal alert provides brief analysis or comments on matters of labor law. This legal alert does not purport to be a substitute for advice of counsel on specific matters.