ERISA-More On Novella: Second Circuit Says That Statute of Limitations On An ERISA Claim To Correct A Miscalculation Of Pension Benefits Begins When The Plaintiff Has Enough Information To Assure That He Knows (Or Reasonably Should Know) Of The Miscalcul

When does the statute of limitations begin to run on a claim brought under ERISA? The Second Circuit Court of Appeals faced this question in Novella v. Westchester County, No.s 09-4061-cv(L), 09-3826-cv(XAP) (2nd Cir. 2011). In that case, the plaintiff, Carlo Novella (“Novella”), brought suit under ERISA on behalf of himself and a class of individuals whose pensions were allegedly miscalculated. Novella’s own situation-since he had two separate periods of service- was that his disability pension was calculated using a 1995 rate for his service from 1987 through 1995, and a lower 1981 rate for his service from 1962 through 1981, when only the (higher)1995 rate should have been applied to both periods of service. The other class members supposedly had the same or similar miscalculations.

As to when the statute of limitations begins to run, on a claim under ERISA to correct a miscalculation of pension benefits, the Court reviewed a number of possibilities, e.g., the running could start when claimant receives her first pension payment, or when the plan first rejects the claim to correct payments. The Court finally concluded that the statute of limitations begins to run on this type of claim when there is enough information available to the claimant to assure that he knows or reasonably should know of the miscalculation. The Court found that Novella’s own claim was timely. However, the Court remanded the case back to the district court, to determine when the statute of limitations had begun to run for each class member. Interestingly, the Court accepted that the statute of limitations, once it begins to run, is 6 years long.

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