New York Life Settles Lawsuit Over Agent Retirement Plan

In 1991, New York Life began making a portion of the Senior NYLIC benefit payments with checks from the NYLIC Retirement Plan. The company made up the difference between what the ERISA plan was paying and what the agents expected with checks for a “non-qualified excess benefit.” The company said the non-qualified benefit was not subject to ERISA.

Because New York Life treated the other benefit as a non-ERISA benefit, the company failed to abide by ERISA vesting, accrual and notice rules in connection with the non-qualified benefit, the agents argued.

Now, “as part of the settlement, New York Life has redesigned the [non-qualified excess] benefit on a going-forward basis in a way that eliminates the technical dispute over whether the benefit is, or is not, an employee pension benefit,” the parties say in a press release describing the settlement agreement.

“This was a good outcome,” New York Life spokesman William Werfelman says about the settlement agreement.

Michael Lieder, a Washington lawyer who helped represent the plaintiffs, is also praising the settlement agreement.

“We believe the agents can continue to enjoy their careers at New York Life secure in the knowledge that their non-qualified benefit will be protected, while those agents who previously left New York Life and submit valid claims under the settlement will be fairly compensated,” Lieder says.

Reproduced from National Underwriter Life & Health/Financial Services Edition, March 5, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.