Advocates for Labor and Progressive Institutions

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Court of Appeals Ruling on Benefit Plans Favors Union

December 2010

Bredhoff & Kaiser lawyers successfully defended the National Education Association in Daniels-Hall v. NEA, No. 08-35531 (9th Cir. Dec. 20, 2010), a case brought by two public school teachers claiming that the NEA violated ERISA in the selection and monitoring of mutual funds available to participants in a nationwide benefit plan established under Section 403(b) of the Internal Revenue Code.

In 2008, the U.S. District Court for the Western District of Washington granted the NEA’s motion to dismiss. The Ninth Circuit affirmed in December 2010, ruling that neither the 403(b) annuities nor NEA’s program endorsing them are ERISA benefit plans, and that the 403(b) plans offered by school districts (in which the NEA-endorsed annuities are available as investment options) are exempt from ERISA because they are governmental plans.