The opinion of the court was delivered by: Judge Joan B. Gottschall
Memorandum Opinion & Order
Plaintiff Judy Levar ("Mrs. Levar") brings this suit seeking to recover additional benefits pursuant to Section 502 of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132 (2006). The parties have filed cross motions for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. For the reasons provided below, plaintiff's motion for summary judgment is denied and defendant's motion is granted.
Defendant Steelworkers Pension Trust (the "Trust") is a benefit plan defined by 29 U.S.C. § 1002(2)(a) and sponsored by the United Steelworkers of America Local 17U (the "Union"). Pursuant to a collective bargaining agreement (the "CBA") between the Union and Indestructo Awning Company ("Indestructo"), Indestructo made contributions to the Trust on behalf of its employees until 1996. Def.'s Resp. Pl.'s Statement of Facts ¶ 35. Gary Levar ("Mr. Levar") was employed by Indestructo until 2003, when he died at the age of 52. Mrs. Levar is the surviving spouse of Mr. Levar and is entitled to receive a survivor benefit from the Trust based on Mr. Levar's pension. At issue is the Trust's calculation of that benefit.
The Trust is governed by a Declaration of Trust called the "Plan" which provides the rules for calculating pension and death benefits. Importantly, the amount of pension payable to an employee is based on time periods during which contributions were made by "Participating Employers" on behalf of that employee pursuant to a collective bargaining agreement. The Plan dictates that the amount of pension payable to a Covered Employee is based on that employee's "credited service."*fn2 Def.'s Statement of Facts Ex. A at 9. "Credited service" includes either Past Service (which is not relevant in this case) or Covered Service. Id. "Covered Service" is defined as "[t]hose periods of employment with a Participating Employer after the date on which the [Pension Program] became effective with that employer and while the Participating Employer continues to make contributions to the Program." Id. (emphasis added).
Normally, a Plan participant who retires after the age of 55 but prior to the age of 65 will have his pension reduced by 3% for every year of difference between the participant's age and 65 as a penalty for early retirement. However, the Plan contains a "Rule of 85" which provides an early retirement exception for certain long service employees. An employee may retire early (between the age of 55 and 65) without any reduction if:
(a) during the twenty-four (24) month period immediately preceding the month of retirement there were at least ten (10) months for which any Participating Employer paid any contribution to the Trust on behalf of the employee, and
(b) the employee's age by years and the number of years of covered service accumulated by the employee add up to eighty-five (85), counting as covered service only those calendar years, including the calendar year in which the retirement occurs, in which there were at least five (5) months for which any Participating Employer paid any contribution to the Trust on behalf of the employee.
Pl.'s Statement of Facts Ex. 1 at 76. Therefore, unless a Participating Employer has paid contributions on behalf of an employee for at least ten months in the two years prior to that employee's retirement, the employee cannot qualify for the Rule of 85.
A. The CBA Between the Union and Indestructo
The CBA between Indestructo and the Union went into effect in 1990. Trust Record D-2 at 1. On November 7, 1996, Tommy Thomas ("Thomas") wrote a letter to the Trust stating that no contract had been in place between Indestructo and the Union since August of 1993. Trust Record D-5. Thomas was the President and Business Representative of the Union at the time. Based upon this letter and Thomas's prior oral representations regarding Indestructo,*fn3 the Trust inactivated Indestructo as a participating employer under the Plan effective August 31, 1996. Pl.'s Resp. Def.'s Statement of Facts ¶ 19.
On November 11, 1996, Thomas wrote a letter to Indestructo stating that there was no contract between the Union and Indestructo and there had not been one since August of 1993. Trust Record D-6. Thomas wrote that the Union wished to negotiate one but there is no evidence that Indestructo made any contributions to the Trust on behalf of any of its employees (including Mr. Levar) after August 31, 1996.
Mr. Levar died on November 26, 2003 at the age of 52. Soon after Mr. Levar's death, the Trust sent letters to Mrs. Levar indicating that because Mr. Levar was a "terminated vested participant" at the time of his death, Mrs. Levar was eligible for coverage under the survivor's benefit provision of the Plan. This meant that Mrs. Levar would be eligible for a surviving spouse's benefit (subject to the early retirement penalty) when Mr. Levar would have reached early retirement age (55) or, alternatively, for the full benefit when Mr. Levar would have turned 65 years old. Trust Record D-17. Mr. Levar would have turned 55 on January 9, 2006. Despite the Trust's repeated request for various documents such as Mr. Levar's death certificate, the Levars' marriage certificate, and Mrs. Levar's Social Security number, Mrs. Levar did not provide the information requested by the Trust. However, Mrs. Levar's brother-in-law, Dana Levar, called the Trust to inquire as to how much Mrs. Levar would receive. See Trust Record D-15.
In response to Dana Levar's request, the Trust sent Mrs. Levar a letter on August 6, 2004, informing her that her monthly benefit (effective February 1, 2006) would be $381.05, a calculation done without the benefit of the paperwork requested of Mrs. Levar by the Trust. See id.
The Trust calculated Mrs. Levar's benefit under the Plan based on Indestructo's status as a "Participating Employer" only through August 31, 1996 (rather than 2003, which is when Mr. Levar stopped working at Indestructo). Trust Record D-11. Because Mr. Levar had not yet reached the age of 65, Mrs. Levar's benefit was subject to the early retirement penalty, which reduced the benefit by 30%. Def.'s Resp. Pl.'s Statement of Material Facts ¶ 9.
Mrs. Levar contended her benefit was entitled to the Rule of 85, which would eliminate the early retirement penalty. Through counsel and through her brother-in-law, Dana Levar, she repeatedly requested that the Trust adjust her benefit to reflect credit for Mr. Levar's work at Indestructo from the years 1996-2003.
The Trust sent letters to Mrs. Levar and her counsel stating that the Trust's records showed no contributions paid on Mr. Levar's behalf by any participating employer since February of 2001 and therefore his pension (and Mrs. Levar's benefit) could not qualify for the Rule of 85. See Trust Record D-24 (letter to Dana Levar dated July 9, 2004). Furthermore, because Indestructo had not made any contributions on Mr. Levar's behalf since 1996 (when Indestructo and the Trust were informed a CBA between the Union and Indestructo no longer existed), Mr. Levar's work at Indestructo after August 31, 1996 could not constitute "covered service."*fn4 Id. D-11 (letter to Mrs. Levar's counsel dated February 7, 2006). The Trust ...