Daniels-Hall v. Nat'l. Educ. Assn., No. 08-35531 - U.S. Ninth Circuit
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Daniels-Hall v. Nat'l. Educ. Assn., No. 08-35531

ERISA Action Claiming Fraudulent Sale of Annuities

In Daniels-Hall v. Nat'l. Educ. Assn., No. 08-35531, an ERISA action by members of the National Education Association (NEA) claiming that the NEA knowingly duped them into purchasing unattractive annuities by creating an atmosphere of trust and confidence that was exploited by defendants for their financial gain, the court affirmed the dismissal of the complaint where 1) a marketing plan designed to build brand loyalty is not, under any reasonable definition of the term, a retirement plan; 2) the lack of governmental funding, when considered in light of the necessary governmental involvement in establishing and maintaining section 403(b) plans, did not prevent these plans from falling within the "governmental plan" exemption; and 3) insofar as the "plan" in the complaint referred to the school districts' section 403(b) annuity plans, plaintiffs failed to state a claim upon which relief can be granted.

 

As the court wrote:  "We must decide whether the National Education Association established or maintained an employee pension benefit plan under the Employee Retirement Income Security Act of 1974 by endorsing and aggressively marketing certain tax-sheltered annuities."

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