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STAATS v. OHIO RIVER CO.

September 7, 1983

ANNA MAE STAATS, Plaintiff
v.
OHIO RIVER COMPANY, Defendant



The opinion of the court was delivered by: WEBER

 Eugene Staats, Sr., died on March 14, 1980, leaving his widow, the plaintiff in this action. On the date of his death Mr. Staats was 58 years old and an active employee of the defendant, Ohio River Company, with 30 years of service.

 Defendant had established pension plans governed by the provisions of ERISA, 29 U.S.C. § 1001 et seq. Plaintiff has sought benefits under these plans following her husband's death and has been refused.

 Plaintiff by this action contends that defendant has wrongfully deprived her of a surviving spouse annuity. Defendant has now moved for summary judgment arguing that because the deceased failed to elect the joint and survivor annuity option, plaintiff is not entitled to benefits. Plaintiff responds by challenging the structure of the pension plans and the sufficiency of the notice of the election opportunity.

 For the reasons stated below, we conclude that defendant's pension plans and means of notice satisfy all statutory and regulatory requirements, and plaintiff is not entitled to a survivor annuity. Defendant's motion will therefore be granted and the action dismissed.

 Defendant's pension plan provides an annuity to a participant on attainment of the normal retirement age of 65. Consonant with 29 U.S.C. § 1055(a), the plan also provides for a joint and survivor annuity option. This joint and survivor annuity becomes effective unless the participant elects out. 29 U.S.C. § 1055(e).

 Defendant also offers the opportunity to retire with an annuity form of payment prior to the normal retirement age of 65. However, ERISA does not require the employer to offer the option of a joint and survivor annuity with all early retirements. Section 1055(b) provides that if a plan offers early retirement, it must also provide a joint and survivor annuity option to participants who reach the later of two defined dates. 29 U.S.C. § 1055(b).

 It is clear in the instant case that the deceased reached the later of the two dates specified in § 1055(b). Mr. Staats had passed both the earliest retirement age under the plan and age 55. Therefore defendant was obligated to offer a pre-retirement joint and survivor annuity option to the deceased. Defendant's plan contains such an option and notice of the option was attempted.

 It is undisputed that the deceased failed to elect the pre-retirement joint and survivor annuity option. Plaintiff seeks to avoid the effect of this omission in two ways, neither of which we find to be sufficient.

 Plaintiff contends that by the terms of § 1055(e) the joint and survivor annuity became effective unless the participant elected out of this option. The argument continues, because Mr. Staats made no election, either affirmative or negative, the joint and survivor annuity took effect and plaintiff is entitled to benefits.

 Having concluded that the pre-retirement joint and survivor annuity option is not automatically effective, we turn to plaintiff's second argument to excuse her husband's failure to elect. Plaintiff's argument, simply put, is that the deceased was denied the opportunity to elect the option because defendant's selected means of notice was improper and ineffective.

 Section 1055(c) and (e) require defendant to provide such notice and informational materials as are necessary to apprise the participant of his option and permit him to intelligently exercise it. In the instant case, defendant sent several packets of material on the pre-retirement joint and survivor annuity option to the deceased by certified mail, return receipt requested.

 Plaintiff claims that the deceased never received these materials and, therefore, had no opportunity to elect the option. It is argued that defendant's use of certified mail failed to comply with applicable regulations regarding transmittal of materials and thereby resulted in the deceased's failure to receive them. A review of the ...


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