You can be a retired plan participant, entirely blameless, and have done everything correctly, but that will not let you hold on to benefit overpayments to you, based on an actuary's miscalculation.  That was the holding in Groves v. Kaiser Found. Health Plan Inc. (N.D. Cal., 2014), decided on March 24, 2014. 

The plaintiff Ramona Groves had received a benefit estimate from the Kaiser plan actuaries stating that her lump sum benefit upon early retirement would be approximately $750,000. She inquired about this benefit several times, and the number was confirmed each time, and Groves then elected to give up her well-paying job, take early retirement and receive the promised benefit. One condition of taking early retirement was that she could not re-apply for employment with Kaiser in the future.

Almost two years later, Groves received a notice that an audit had determined that her benefit was miscalculated and that she had been overpaid by $240,000 and would be required to repay it. Groves sued Kaiser and its actuaries to attempt to block the repayment claim and to recover damages related to giving up her employment.

Groves' claim against Kaiser was for equitable estoppel, arguing that the pension plan was precluded from denying her the higher benefit after communicating her entitlement to the benefit and after she relied on that communication. The court found that ERISA precluded such a claim where there was purely a miscalculation of the benefit, and there was no ambiguity in the plan provisions which governed the calculation.

The court then dismissed the negligence and negligent misrepresentation claims against the actuaries on ERISA pre-emption grounds. ERISA pre-empts state law claims like the tort claims against the actuaries where the damages sought are a claim for benefits under a pension plan. Since Congress did not create such a remedy in ERISA against plan professional like actuaries, a participant could not circumvent that statutory scheme by bring a cause of action under state law. There was a suggestion in the decision, however, that if the plaintiff solely focused her suit on a claim that the negligence of the actuaries had led the plaintiff to give up her job and caused her damage other than the loss of the higher benefit, she might be able to state a claim which would survive an ERISA preemption challenge.

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