The opinion of the court was delivered by: George M. Marovich, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff James Sinclair ("Sinclair") filed this action against his former employer Delta Dental Plan of Illinois and Nancy Karasek, Plan Administrator (collectively "Delta Dental") alleging violations of the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1102 et seq. ("ERISA"). Delta Dental moved for judgment on the administrative record. For the reasons set forth below, the Court grants Delta Dental's motion.
Sinclair was an employee of Delta Dental from 1973 until 1981. Sinclair's employment ended due to disability. At the time, he was 36 years old. Under the terms of the Plan, Sinclair has continued to accrue years of service for purposes of calculating retirement benefits under the Plan. The parties dispute concerns the timing of when Sinclair is eligible to begin collecting those benefits. Sinclair maintains he is entitled to them at age 55, however, Delta Dental has decided he is not eligible to collect them until he turns 65.
The facts leading up to this lawsuit date back to 1995, when Sinclair requested a lump sum distribution of his benefits. Under the terms of the Plan, lump sum distributions are allowed only if a participant's total benefit is $3,500 or less. Sinclair's benefit exceeded $3,500, therefore, Delta Dental denied his request.
Sinclair then inquired as to whether he was eligible to begin receiving early retirement benefits at age 55. By letter dated June 4, 1996, Delta Dental advised Sinclair that he was not eligible for early retirement benefits. Specifically, the letter stated Section SA of the Plan did not permit payments prior to the participant reaching age 65. On June 25, 1996, Sinclair's attorney advised Delta Dental that he intended to research the matter and prepare a response. About a week prior to the response deadline, Sinclair's attorney informed Delta Dental, without explanation, that Sinclair no longer intended to pursue his claim for early retirement benefits.
Delta Dental sent a confirming letter, which also informed Sinclair that he would be entitled to an estimated monthly benefit of $2,914.55 upon reaching normal retirement age. Sinclair signed the letter indicating his agreement with its terms, however, his attorney was careful to point out that Sinclair's agreement was not a waiver of any rights Sinclair may have upon termination of the Plan.
From then on, Sinclair received annual estimates of his benefit as of his normal retirement age. About two and a half years later, at age 54, Sinclair requested an estimate of his benefits as of age 55. Delta Dental processed the request, and Sinclair then filled out a form electing to receive benefits at age 55, commencing September 1, 2000. There was no discussion of Sinclair's eligibility for early retirement benefits, nor was there mention that his prior request had been denied. Rather, the form was processed and Sinclair began receiving monthly distribution checks.
After several months, Delta Dental discovered the error and sent Sinclair a letter explaining that his receipt of benefits had been a mistake. Delta Dental referred to the denial of his first request for early retirement benefits, attached a copy of the July 17, 1997 letter confirming the same, and reiterated that he was not eligible for benefits until he reached age 65. Delta Dental also advised Sinclair that he was entitled to an appeal and attached a copy of the claim review procedures.
In response, Sinclair's attorney indicated that he understood the Plan was amended after July 17, 1997 to allow Sinclair to receive early retirement benefits. He requested copies of the relevant Plan documents, which Delta Dental provided. On September 1, 2001, Sinclair's attorney filed an appeal.
Shortly thereafter, Delta Dental advised Sinclair's attorney that his position, namely, that Sinclair's benefits should begin at age 55, was in direct conflict with the terms of section 5A.2 of the Plan. Nonetheless, Delta Dental advised Sinclair's attorney that he had 30 days to file additional documents or arguments, such as affidavits evidencing statements made to Sinclair that would support this position. Sinclair's attorney submitted another letter appealing this decision arguing, inter alia, that Section 5A.2 of the Plan did not prohibit Sinclair from receiving early retirement benefits. He made no reference to specific changes in the Plan after 1997.
On November 6, 2001, Delta Dental issued a ten page opinion denying Sinclair's appeal. In sum, the opinion states that Sinclair's request was granted in error and that such mistakes were correctable under the terms of the Plan. Delta Dental advised Sinclair that he would begin receiving disbursements again when he reached age 65. This lawsuit followed. Now pending is Delta Dental's motion for judgment on the administrative record.
A denial of ERISA benefits is reviewed de novo unless the benefit plan grants the administrator discretionary authority to determine benefit eligibility or construe the plan terms. Firestone Tire & Rubber Co., v. Bruch, 489 U.S. 101, 115 (1989). Where discretionary authority exists, the decision is reviewed under the arbitrary and capricious standard. Hess v. Hartford Life & Accident Ins. Co., 274 F.3d 456, 461 (7th Cir. 2001). There are no magic words which determine the standard of review. Herzberger v. Standard Ins. Co., 205 F.3d 327, 331 (7th Cir. 2000). The ...