:: New Scholarship On Discretionary Clause Debate

his from the Wills, Trusts & Estates Prof Blog:

Joshua Foster (J.D. Candidate, June 2008, St. John’s University School of Law) has recently published his Note entitled ERISA, Trust Law, and the Appropriate Standard of Review: A De Novo Review of Why the Elimination of Discretionary Clauses Would be an Abuse of Discretion, 82 St. John’s L. Rev. 735 (2008).

The article supports the use of discretionary clauses as adequately protecting the interested parties and consistent with trust law that underlies ERISA and state insurance law.

From the article:

Part I of this Note will give a brief background of ERISA, New York insurance law, the assertions of the Department as set forth in the Circular Letters, and the Model Act upon which many statutory schemes draw from.  Part II will examine the Firestone decision and its emphasis on trust law in keeping with the legislative intent underpinning ERISA.  Part III will examine the policy concerns that both sides raise and will argue that the current system has benefited the parties that ERISA legislation has intended to protect while providing additional benefits to the judicial system.