Consumer Agenda for Retirement Security

Initiative #2: Empower workers to promote their own retirement security

H. Give participants adequate explanations of benefit eligibility and calculations.

Department of Labor regulations do not require that a plan explain how it calculated a particular benefit, so a participant sometimes has no easy way to determine whether a benefit calculation is correct.  Although the ERISA claims procedure does require that any benefit denial be accompanied by an adequate notice setting forth the specific reasons for the denial, there is no requirement that the plan provide the documents on which the denial is based.  Moreover, there is no generally enforced penalty when a plan fails to provide the explanation.  At the same time, participants have just 60 days to appeal a claim’s denial, which can be impossible to do when the plan fails to provide an adequate explanation and the underlying documents. 

The Department of Labor can remedy these problems by revising its claims procedure regulations to require that plans provide benefit calculations, including any worksheets, to all claimants and to specify the information that the plan must include in its explanation of a claims denial.  The regulation should also require that the plan provide all supporting documents, relevant work records, and any internal or legal memorandum discussing the benefit denial.  The appeals process should be extended to 120 days, as it was for health care claims, and the period should not begin until the participant has received the explanation and all relevant documents.

Learn more about the other initiatives in the Consumer Agenda for Retirement Security.

Initiative 1: Promote a more adequate and secure private retirement income system.
Initiative 2: Empower workers to promote their own retirement security.
Initiative 3: Improve retirement savings plans.
Initiative 4: Improve traditional and hybrid pension plans.
Initiative 5: Make retirement plans fairer for workers and their spouses.

Print the Consumer Agenda for Retirement Security [PDF].