## Facts

- Randall A. Beach worked for Commonwealth Edison Co. (ComEd) for 31 years and retired in June 1997 at age 52, relocating to Idaho.
- By retiring before age 55, Beach forfeited eligibility for future retiree health benefits but retained a vested pension.
- ComEd was reorganizing and, in some departments, offered voluntary separation “sweeteners” (e.g., severance pay and health benefits).
- Before retiring, Beach asked his supervisor and human resources staff whether his department would soon receive a voluntary separation package; he was told it would not.
- Around the time of Beach’s departure, ComEd began internal discussions about reorganizing his former department and reducing staff.
- In late July/early August 1997, ComEd developed and then offered (August 7, 1997) a separation incentive package to a subset of employees in Beach’s former department.
- It was undisputed that Beach would have been eligible for the package had he remained employed on August 7, 1997.
- Beach sought to receive the separation benefits as if he had remained employed; ComEd refused.

## Issues

1. Whether ComEd, acting as an ERISA fiduciary, had a duty to provide accurate or complete information about the possibility of a future separation incentive program when Beach asked before the program was being actively considered.
2. Whether incorrect, good-faith statements or predictions about future benefit changes made before “serious consideration” can constitute a breach of ERISA fiduciary duty.

## Decision

- The Seventh Circuit reversed the district court’s judgment for Beach.
- The court held ComEd did not breach an ERISA fiduciary duty by failing to disclose or predict the later adoption of the separation program.
- The court concluded the challenged statements were, at most, good-faith predictions made before any relevant proposal was under serious consideration.
- The case was remanded with directions consistent with denying Beach the separation benefits.

## Legal Principles

- ERISA fiduciary duties generally do not require an employer to disclose or predict possible future plan changes before the employer is seriously considering a specific proposal.
- Liability is more likely for misstatements about existing plan terms or concrete proposals under active evaluation than for good-faith predictions about future business decisions.
- Decisions to create or modify benefit programs are typically settlor (business) decisions, not fiduciary acts, until the employer moves to plan administration or communicates about a concrete proposal.
- A later-occurring benefit change does not retroactively make earlier, non-deceptive predictions actionable under ERISA.

## Conclusion

The Seventh Circuit held that ComEd had no ERISA fiduciary liability for telling Beach that no separation package was forthcoming when, at the time of his retirement decision, the company had not yet begun serious consideration of such a program for his department.


Beach v. Commonwealth Edison Co., 382 F.3d 656 (7th Cir. 2004)