Opinion ID: 803614
Heading Depth: 2
Heading Rank: 3

Heading: AT&T’s Duty to Disclose

Text: [4] Day faults AT&T for failing to disclose to him the disadvantages of choosing the IRA option, particularly its effect 4 We also noted that the doctrine does not apply to a “self-funded” plan. Blankenship, 486 F.3d at 625. Sedgwick also properly invoked this exception. DAY v. AT&T DISABILITY INCOME PLAN 7855 on his LTD benefit payments. Upon termination of his employment, Day had several options for his pension. Apparently unaware of these consequences, he chose the IRA rollover not knowing that this seemingly insignificant election could cost him $17,000 in disability benefits to which he was otherwise entitled. Day concedes that AT&T did nothing to compel him into making this election, nor did it give him any false information regarding his choices. But he contends that AT&T breached its statutory and common law fiduciary duties by failing to affirmatively advise him of the financial consequences that could arise were he to elect a rollover. Although we have some sympathy for this argument in general, it is not compelling here. First, Day argues that the 2002 SMAART Guide he received did not include any explanation of the possible benefits offset and did not refer the reader to the SPD, which contained a more in-depth description of the offsetting policy. AT&T responds that this omission was corrected in the 2005 SMAART Guide sent to all employees that explicitly refers participants to the SPD, but Day disputes receiving it. In any event, he does not dispute that he had access to the SPD itself, which explained the offset policy at some length. Thus, the undisputed evidence shows that at the relevant times during his employment, AT&T furnished Day with Plan documents explicitly stating that disability benefits would be offset by pension benefits received or paid. Second, we find no legal basis for Day’s contention that, at the time of his separation from employment, AT&T was under an affirmative obligation to remind Day of the offset provisions or to advise him in particular that electing a lump sum rollover of his pension benefits could result in a substantial reduction of his LTD benefits or a tax penalty. Day relies on cases in which employers deceived beneficiaries to evade plan obligations. See, e.g., Varity Corp. v. Howe, 516 U.S. 489, 493-94 (1996); Farr v. U.S. W. Commc’ns, Inc., 151 F.3d 908, 911-12 (9th Cir. 1998); Griggs v. E.I. DuPont de Nemours & Co., 237 F.3d 371, 374-76 (4th Cir. 2001). 7856 DAY v. AT&T DISABILITY INCOME PLAN [5] Here, by contrast, Day asserts only the failure to mail him a reminder of information that was already contained in the SPD, not a scheme to “deceiv[e] a plan’s beneficiaries in order to save the employer money at the beneficiaries’ expense.” Varity, 516 U.S. at 506. It might seem a simple matter, for example, for AT&T to have imprinted a reminder of potential disability benefits offsets on the form Day used to exercise his distribution option. Cf. Chappel v. Lab. Corp. of Am., 232 F.3d 719, 726-27 (9th Cir. 2000) (holding that an ERISA plan administrator would have breached its fiduciary duty if it adopted a mandatory arbitration clause with a 60-day time limit in which to demand arbitration, and gave notice of the clause and its terms only in a summary plan description contained in an employment manual). However, such advice would not be relevant to all users of the rollover procedure and there is no legal requirement that such a form include warnings of all potential consequences when plan documents already contain that information for the employee. Cf. Farr, 151 F.3d at 915 (observing that there is no “duty to provide Plaintiffs with individualized notice of all the ways the tax laws would impact each of their individual distributions”). AT&T thus did not breach its fiduciary duties by failing to disclose information.