When are Releases of Claims for ERISA Plan Benefits Effective? (Part II)

Abstract

Part II of this Article discusses how courts have determined the effectiveness of a release of an individual's claim to a benefit entitlement under an ERISA plan after summarizing the proposed analysis presented in Part I.

Most courts have applied contract principles, supplemented at times by special scrutiny. The courts have rarely considered whether the ERISA prohibition of any agreement purporting to relieve fiduciaries of their duties requires plan fiduciaries to disregard any agreement purporting to release claims to any ERISA benefit entitlements. Few courts have considered the applicability of fiduciary principles to the determination of the effectiveness of a release of such claims. Nor have many courts considered whether the ERISA spendthrift prohibition on the assignment or alienation of pension benefits voids any release of such a plan or its fiduciaries from a claim that an individual is entitled to accrued benefits under such plan.

The article considers how the fiduciary release principles and the analysis proposed in Part I would change some but not all of the court decisions. There is also a discussion of how most but not all courts have held that releases which do not specifically describe both the released party and the released claim are generally void. The first article argued that such releases are generally void.

Thus, the article concludes that individuals have been wrongfully deprived of pension and welfare benefits to which they are entitled.

Keywords: ERISA, benefits, releases, waivers, employee benefits, employment releases, general releases

JEL Classification: H21, J32, K31, K34, M52