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TUCCI v. EDGEWOOD COUNTRY CLUB

November 6, 1978

James TUCCI, Plaintiff,
v.
EDGEWOOD COUNTRY CLUB, Defined Benefit Retirement Income Plan for Employees of Edgewood Country Club, an Employee Benefit Plan and Bankers Life Company, Defendants



The opinion of the court was delivered by: TEITELBAUM

MEMORANDUM OPINION AND ORDER

FACTS

 James Tucci was hired on June 28, 1966 as Chief Chef of defendant Edgewood Country Club. Defendant Edgewood contends that about 1970 his performance began to deteriorate as supervisor of the food acquisition and preparation department. With complaints allegedly accumulating, plaintiff Tucci was told on February 17, 1976 that he would have to either leave or step down to a cook's position. *fn1" Being unwilling to step down to a cook's job, plaintiff's employment was terminated on February 17, 1976.

 Meanwhile, during late 1975 and early 1976, Edgewood directors had been negotiating with Bankers Life Company for an insurance funded pension program for its employees, to replace the old program which had existed since April, 1958. This negotiation was a result of the newly enacted requirements of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C.A. § 1001 Et seq. The Edgewood Board of Directors adopted the new Bankers Life Plan on February 28, 1976; it was agreed to by Bankers Life on March 28, 1976; and it was formally executed on March 30, 1976. Under the old retirement plan 20 years of employment were required to qualify for a pension. Under the new Bankers Life Plan, which was explicitly made retroactively effective as of June 1, 1975, complete vesting of pension benefits occurred upon 10 years of credited employment. Both plans provided no vested benefits for employment less than the required 10 or 20 years.

 After plaintiff's complaint to this Court, a motion to dismiss was filed by defendants and a motion for summary judgment was filed by plaintiff. Submission of affidavits relative to defendants' motion to dismiss results in both matters being before the Court as motions for summary judgment. Federal Rule of Civil Procedure 12(b). The only issue to be decided is whether or not plaintiff is entitled to a pension under the new Bankers Life Retirement Plan of Edgewood Country Club.

 PLAN PARTICIPATION

 Defendants first contend that plaintiff is not entitled to a pension because he was never a participant under the 1976 pension plan. Defendants' position is that an employee whose employment is terminated when a retirement plan is not yet adopted cannot reasonably be called a plan participant merely because a plan later adopted is made retroactive to a date prior to his termination. Defendants therefore conclude that since plaintiffs' employment ceased as of February 17, 1976 and the Bankers Life Plan was adopted sometime shortly thereafter, plaintiff is relegated to any benefits obtainable under the 1958 pension provisions. The 1958 pension plan entitled plaintiff to no benefits because he had not worked for 20 years. Defendants would then not be required to pay plaintiff any pension.

 
"It is intended that the existing plan, as changed, will comply with the requirements of the Employee Retirement Income Security Act of 1974 and any subsequent amendments to the Act. It is believed that the best means to accomplish such changes is to amend said plan to completely restate the terms, provisions and conditions of said plan, which restatement, effective June 1, 1975 is substituted in lieu of said plan.
 
All persons covered under the existing plan on May 31, 1975 will be covered under the restated plan . . ."

 Plaintiff was indisputably a person covered by the 1958 plan on May 31, 1975 because his employment did not cease until February 17, 1976. Therefore, pursuant to the express language ratified by the Edgewood Board of Directors, plaintiff is a participant under the 1976 retirement plan.

 VESTING

 Having determined that plaintiff is a participant in the 1976 pension plan, the only other issue requiring resolution is whether or not plaintiff had accumulated the 10 years of service necessary for vesting under the new plan. Defendants contend that plaintiff has 9 years, 11 months of credited service and thereby fails to qualify for a pension by one month.

 The 1958 retirement plan gave no definition whatsoever as to what constituted a year of employable service. ERISA, however, requires that a year of service be credited whenever an employee works 1000 hours in a given yearly period. 29 U.S.C.A. § 1052(a)(3)(A). There is no dispute that plaintiff should be credited with one year of service for his employment from June 1, 1975, the effective date of the 1976 plan, to February 17, 1976. Both parties agree that he had worked the required 1000 hours that year. Disagreement surfaces as to the ...


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