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In ordering arbitration of a pension plan dispute, a federal court in Michigan held that individual participants in the plan were bound by an arbitration agreement entered into by the plan's trustee.
In Vanvels v. Betten, No. 106-CV-710, 2007 WL 329048 (W.D. Mich., Jan. 31, 2007), Vanvels sued Rajah, a pension plan manager, on behalf of pension plan participants. The lawsuit alleged that Rajah breached his fiduciary duty by mismanaging the pension plan.
Rajah moved to compel arbitration pursuant to an account agreement entered into by the plan's trustee. The issue before the Court was whether the individual participants in the plan were obligated to arbitrate under an account agreement that they did not sign.
The Court held that the individual participants were obligated to arbitrate based on the rule that "the assertion of rights by a participant on behalf of an ERISA pension plan are subject to the rights and limitations of the plan itself, including any contractually incurred obligations to arbitrate." See Massachusetts Mut. Life Ins. v. Russell, 473 U.S. 134, 140-43 (1985); Javitch v. First Union Sec., Inc., 315 F.3d 619, 625 (6th Cir. 2003).
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