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Inadequate Discretionary Authority Language Leads to Unfavorable Review Standard


A former employee of a long-term disability plan sued the plan after the plan administrator terminated her benefits and denied her appeal. The employee argued that the plan administrator’s decision should be reviewed under the less deferential de novo standard, while the plan argued that the arbitrary and capricious standard applied. The court reviewed the determination using the de novo standard, finding that the Summary Plan Description (SPD) did not adequately delegate the authority to the claims administrator to determine eligibility for benefits or construe terms of the plan. Therefore, the court concluded that the claims administrator was not vested with discretionary authority. To increase the likelihood of a deferential review by a court, plans should ensure that the delegation of discretionary authority is clearly outlined in the plan documents.

Miller v. PNC Financial Services Group, Inc., 2017 WL 4404469 (S.D. Fla. 2017)


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