The opinion of the court was delivered by: Magistrate Judge Morton Denlow
MEMORANDUM OPINION AND ORDER
This is an ERISA class action suit in which Plaintiff Cynthia N. Young ("Plaintiff") alleges that Defendants Verizon's Bell Atlantic Cash Balance Plan and Verizon Communications Inc. (collectively "Defendants") calculated her pension benefits, and those of others similarly situated, using an improper formula. Before the Court is Defendants' motion to quash discovery and for a protective order. The discovery relates to Defendants' affirmative defenses and Plaintiff's allegations that Defendants acted as administrators of the Plan under a conflict of interest. The Court held oral argument on July 24, 2007. For the following reasons, the Court denies in part and grants in part Defendants' motion.
The history and facts of this case are extensive and, given the current procedural posture of the case, not yet fully before the Court. The Court provides as background only what is necessary to decide the present motion.
A. Plan History and Provisions
The plan at issue in this case began as a "traditional" defined-benefit pension plan known as the Bell Atlantic Management Pension Plan ("BAMPP"). On December 31, 1995, Bell Atlantic converted the BAMPP into the Bell Atlantic Cash Balance Plan ("1995 Cash Balance Plan"). A cash balance plan is a type of defined-benefit plan in which the benefit is based on pay and interest credits. See U.S. Dept. of Labor, Types of Retirement Plans, available at http://www.dol.gov/dol/topic/retirement/typesofplans.htm (last visited July 25, 2007). The 1995 Cash Balance Plan was restated in 1997 ("1997 Cash Balance Plan") and again in 1998 ("1998 Cash Balance Plan").
Plaintiff relies on two provisions of the Plan*fn1 for her claim to additional benefits. As stated in the 1997 Cash Balance Plan, the first provision ("transition factor provision") reads:
16.5.1(a)(2) Not Eligible for Service Pension
In the case of a Participant who is not eligible for a Service Pension under the 1995 BAMPP Plan as of the Transition Date, the amount described in this paragraph (2) is the product of multiplying (A) the Participant's applicable Transition Factor described in Table 1 of this Section, times (B) the lump-sum cashout value of the Accrued Benefit payable at age 65 under the 1995 BAMPP Plan, determined as if the Participant had a Severance From Service Date on December 31, 1995, based on Compensation through December 31, 1995, multiplied by the applicable transition factor described in Table 1 of this Section. For a 1995 Former Active Participant, the date on which the individual ceased to be an Eligible Employee shall be substituted for December 31, 1995 in the last phrase of the previous sentence.
PX B (italics in original).*fn2 Plaintiff argues that this provision required the plan administrator to multiply Plaintiff's lump-sum cashout value times the transition factor twice.
The second provision on which Plaintiff relies relates to the discount rate applied to calculate the present value of Plaintiff's accrued benefits ("discount rate provision"). Plaintiff alleges that Verizon used a 120% discount rate instead of a 100% discount rate in violation of the Plan terms. Plaintiff seeks discovery specific to Defendants' denial of her claim based on the transition factor provision, but not the decision as to the discount rate provision.
Plaintiff initially sought additional benefits based on the discount rate provision. The Verizon Claims Review Unit ("Review Unit"), and later the Verizon Claims Review Committee ("Review Committee"), denied Plaintiff's claim. Plaintiff later claimed additional benefits based on the transition factor provision, and was denied by the Review Unit. Plaintiff appealed to the Review Committee.
On April 5, 2007, the Review Committee denied Plaintiff's request for additional benefits based on the transition factor provision. The Review Committee acknowledged that "Section 16.5.1(a)(2) . . . provides for application of the transition factor twice," but characterized the second reference to the transition factor as a "drafting error," noting that "there are other plan documents and other plan provisions that provide for only a single application of the factor." DX 12. The other plan documents cited by the Review Committee are resolutions of the Bell Atlantic Benefits Committee and the Board of Directors Human Resources Committee ("HRC"), a provision of the Plan applicable to a different class of participants, and later restatements of the Plan, all of which require application of the transition factor only once. Id.
The Plan grants discretion to the Review Committee "to make findings of fact; to interpret the Plan and resolve ambiguities therein; to make factual determinations; to determine whether a claimant is eligible for benefits; to decide the amount, form, and timing of benefits; and to resolve any other matter under the Plan which is raised by the claimant or identified by the respective committee." DX 14. Characterizing the discrepancies between the cited provisions and the language of Section 16.5.1(a)(2) as an ambiguity that the Plan authorized the Review Committee to resolve, the Review Committee concluded that it could refer to additional documents to resolve the discrepancies. Id. Those documents included a memo sent to Bell Atlantic by its human resources consultant, materials provided to the HRC, materials sent to Bell Atlantic managers, a brochure sent to employees, opening account balance estimates sent to employees in November 1995, an actuarial report, and plan records indicating the opening account balances for all employees subject to section 16.5.1(a)(2), all of which indicate that the transition factor would be applied only once. Id. The Review Committee concluded that inclusion of the second reference to ...