The opinion of the court was delivered by: HUYETT
Pending before me are cross-motions for summary judgment filed by plaintiff Dolores Naddeo and intervenor Charles S. Naddeo in this case involving construction of the Retirement Equity Act of 1984 (the Act). Both parties seek to recover the entire amount of pension benefits due as the result of the death of Charles J. Naddeo, who was the husband of plaintiff and the father of intervenor. As explained below, my interpretation of the Act calls for the parties to split the sum (approximately $190,000) from decedent Naddeo's account.
There is no dispute as to the facts in this case, and both parties agree that summary judgment is appropriate. My decision hinges solely on narrow questions of statutory interpretation of the Act and of its transitional rules, Pub. L. No. 98-397, § 303, 98 Stat. 1451 (1984). There is also no dispute that defendant Officers and Employees Pension Plan of Laundry, Dry Cleaning & Dye Workers' International Union (the Plan) must pay approximately $190,000 to decedent's beneficiary or beneficiaries. I have, therefore, with the consent of the parties, dismissed the Plan from this action, ordering it to pay the balance of decedent's account into the registry of the court.
Decedent, an officer in the Laundry, Dry Cleaning & Dye Workers' International Union, participated in the union's pension plan. Contributions were made to an individual account on decedent's behalf. It was envisioned that, upon decedent's retirement, the amount in his account would be used to purchase a joint and survivor annuity for the benefit of decedent and of his spouse. However, decedent died on December 24, 1984, before retirement but after his pension rights had vested.
Under the terms of the plan in existence at the time of decedent's death, the entire amount in his account was to be treated as a death benefit and was to be paid to whomever decedent had chosen as his beneficiary. In accordance with this plan (the 1977 version), decedent had named his son Charles S. Naddeo as his beneficiary. Decedent made this designation in the spring of 1984, after his marriage to his second wife, Dolores Naddeo. Looking solely at the terms of the 1977 plan, intervenor is entitled to the full amount in his father's account.
Under section 302 of the Act, ERISA amendments, including the QPSA requirement, are applicable "to plan years beginning after December 31, 1984." But section 303 sets out transitional rules which are to govern in the event that a qualified participant "dies on or after the date of the enactment of this Act and before the first day of the first plan year to which the amendments made by this Act shall apply." § 303(c)(2). In other words, the transitional rules apply to those, such as decedent, who died after passage of the Act but before his employer had a chance to amend its plan. In these situations, the transitional rules mandate that the QPSA amendments "shall be treated as in effect as of the time of such participant's death." Id. Looking solely at the terms of the Act, it appears that the parties are each entitled to 50% of the balance of decedent's account.
However, following decedent's death, the Plan took action that further complicates and confuses this dispute. On September 16, 1985, the Plan trustees amended their 1977 plan to incorporate the requirements of the Act. The trustees not only complied with the Act with regard to the QPSA, but went further and defined the QPSA as an amount equal to 100% of the participant's account. (The Act defined the QPSA as not less than 50% of the account, but set no upper limit on it.) The 1985 version of the plan was made retroactive to January 1, 1984, although the spousal consent provision was made effective as of January 1, 1985. Section 7.2(d). Plaintiff contends that under this version of the plan she is entitled to 100% of her late husband's benefits.
Since it is uncontroverted that there is no genuine issue as to any material fact, summary judgment is appropriate here. Fed.R.Civ.P. 56(c); Small v. Seldows Stationery, 617 F.2d 992, 994 (3d Cir. 1980). Furthermore, since the case turns wholly on a question of statutory interpretation, summary judgment is especially warranted. This legal question is one of first impression, so I must construe the transitional rules without the benefit of precedent.
As this case proves and as legislators have now recognized, the transitional rules are ambiguous. See Intervenor's Trial Brief at 10 (citing legislation that has been introduced to clarify Act's ambiguity). Section 303 might be interpreted to allow dual recovery in a case in which there is a surviving spouse as well as another previously designated beneficiary. This result would surely not be what Congress had intended. Accordingly, fairness dictates that the transitional rules be read with ...