The opinion of the court was delivered by: Aspen, District Judge:
MEMORANDUM OPINION AND ORDER
Plaintiff Samuel Torrence brought this action under §
502(a)(1)(B) of the Employee Retirement Income Security Act of
1974, 29 U.S.C. § 1132(a)(1)(B), seeking relief for the alleged
wrongful denial of pension fund benefits. Named as defendants
were the Chicago Newspaper Association-Drivers Union Pension
Plan ("Plan"), the Chicago Newspaper Association-Drivers Union
Pension Administrative Board ("Board"), and the First National
Bank of Chicago ("Trustee").*fn1 Jurisdiction is alleged
pursuant to 29 U.S.C. § 1132(e). On December 1, 1981, this
Court granted defendants' motion for partial summary judgment
as to plaintiff's claim that the Board's decision denying him
benefits was arbitrary and capricious. Disposition of
defendants' motion for full summary judgment was continued
however, pending the submission of supplemental briefs relating
to plaintiff's claim that defendants may be equitably estopped
from denying him pension benefits. We now deny defendants'
pending motion for summary judgment.
Assuming plaintiff's factual allegations are true,
Cedillo v. International Association of Bridge and Structural
Iron Workers, Local Union No. 1, 603 F.2d 7, 10-11 (7th Cir.
1979), defendants in this action are not entitled to summary
judgment. As reflected in our prior opinion on this motion, the
applicability of the doctrine of equitable estoppel under ERISA
is by no means clear. Torrence, supra at 747. Although the
Seventh Circuit has questioned the "advisability of employing
estoppel principles" in a union pension plan dispute, Reiherzer
v. Shannon, 581 F.2d 1266, 1267 n. 1 (7th Cir. 1978), no
Seventh Circuit rule dictates the result in this case.*fn4
Under these circumstances, the Court is compelled to examine
the rationale underlying courts' general reluctance to apply
estoppel principles in union pension plan disputes and whether
that rationale applies in this case.
The fiduciary duties of pension plan trustees under ERISA
are directed "solely in the interest of participants and
beneficiaries . . . for the exclusive purpose of . . .
providing benefits to participants and their beneficiaries."
29 U.S.C. § 1104(a)(1)(A)(i) (1976). Moving defendants argue
that compelling them to distribute pension benefits to
plaintiff in this case would violate these fiduciary duties and
work to the prejudice of eligible participants and
beneficiaries. Defendants argue further that payment of pension
benefits to a person who has been deemed ineligible to receive
such benefits would impair the actuarial soundness of the
pension plan. The Court finds none of these arguments
persuasive in this case.
The fiduciary duty of pension plan trustees toward
"participants and beneficiaries" under ERISA cannot be viewed
As a remedial statute, ERISA was intended, inter alia, to
"ensure that legitimate expectations of workers in receiving
retirement benefits actually materialize." United Association
of Journeymen and Apprentices v. Myers, 488 F. Supp. 704, 708
(M.D.La. 1980). Viewing ERISA in this light, it would be
incongruous for the Court to permit defendants to defeat the
potentially legitimate expectations of plaintiff by resorting
to a narrow interpretation of their statutory duties.
The defendants' fiduciary duty to provide benefits to
participants and beneficiaries under the plan necessarily
encompasses a subsidiary duty to maintain the integrity and
credibility of the plan itself. The denial of benefits to
plaintiff, a former participant, does not advance that end.
The importance of such a duty is manifest in this case where,
unlike many of the cases cited by the defendant,*fn6 union
officials and Board members allegedly encouraged plaintiff to
accept the job with Levy in addition to merely assuring him
that his eligibility for benefits would continue. If union and
Board officials are permitted to affirmatively mislead current
participants in this manner, the fiduciary duty to provide
pension benefits to those participants constitutes nothing
more than a hollow formalism.
Further, this Court is not satisfied that compelling the
defendants to distribute pension benefits to plaintiff would
either deflate the pension fund for other eligible
participants or impair the "actuarial soundness" of the Plan
in any meaningful sense. The size of the pension fund in this
case has been increased by contributions made in plaintiff's
behalf by the Chicago Sun-Times, the Capitol News Agency and
the Chicago Tribune for work performed from 1958 to 1965 and
again from 1972 to 1979. Payment of pension benefits to
plaintiff would simply draw upon those funds contributed to
the Plan in his behalf.
The potential depletion of the pension funds cited by
defendants as a result of this case is further mitigated by
§ 7.10(m) of the pension plan which requires that the Board:
. . purchase such insurance and [ ] pay such
premiums for the Members of the Board and any
employees of the Board to cover any liability or
loss to the trust funds occurring by reason of
the act or omission of a Member of the Board and
any employee of the Board, provided however that
all such insurance shall permit recourse by the
insurer of such insurance contracts against a
Member of the Board in the case of a breach of a
fiduciary obligation by such Member.
Id. Although neither party has raised this insurance provision
in their supplemental briefs, it would appear from the terms of
the provision that the pension fund will not be deflated in any
way by granting relief to plaintiff if he can substantiate his
allegations. To the extent plaintiff's benefits will be paid
out of insurance proceeds, current participants and
beneficiaries will not be prejudiced in any respect.
Recognizing, therefore, that principles of equitable
estoppel may bar the defendants from denying plaintiff pension
benefits, this Court will deny defendants' ...