Defendant's first argument is that plaintiff's claim is barred by laches. In general, laches requires a showing that the non-moving party failed to diligently prosecute the claim and that the moving party suffered prejudice because of the delay. Costello v. United States, 365 U.S. 265, 282, 81 S. Ct. 534, 543, 5 L. Ed. 2d 551 (1961). The resolution of these issues is committed to the sound discretion of the trial court. Burnett v. New York Central Railroad Company, 380 U.S. 424, 435, 85 S. Ct. 1050, 1058, 13 L. Ed. 2d 941 (1965).
The courts have been reluctant to apply the doctrine of laches to pension cases. The rule is, as I stated in an earlier decision, that pension claims accrue on retirement, but the claimant has the option of bringing suit when an anticipatory breach occurs. Troiani v. Bethlehem Steel Corp., 570 F. Supp. 1140, 1143 (E.D. Pa. 1983) (citing Davis v. Alabama Power Co., 383 F. Supp. 880, 892 (N.D. Ala. 1974), aff'd per curiam, 542 F.2d 650 (5th Cir. 1976), aff'd on other grounds, 431 U.S. 581, 97 S. Ct. 2002, 52 L. Ed. 2d 595 (1977)). See also Gall v. United States Steel Corp., 598 F. Supp. 769 (W.D. Pa. 1984); Letson v. Liberty Mutual Insur. Co., 523 F. Supp. 1221 (N.D. Ga. 1981).
Defendant argues that the case at bar is different from other pension cases because the plaintiff wrote a letter in 1956 asking for the relief requested today. That letter, defendant asserts, started the clock running on plaintiff's claim, and if the plaintiff wanted to appeal the denial of benefits, he had to do so in 1956. I cannot agree. The plaintiff merely sent an informal handwritten inquiry to the N.Y.C. plan. The plan sent back a form letter stating that no credit would be given for service prior to the date of election. Plaintiff did not choose to start the clock running in 1956. He waited until retirement was rapidly approaching and then filed a formal complaint with the Committee in 1983. There was nothing improper in plaintiff's actions.
There are several other reasons why it would be inequitable to bar plaintiff's claim. First, it is unclear that defendant has been sufficiently prejudiced by the passage of time so "as to overcome the policy of ERISA favoring recovery of benefits that have been earned through long years of service." Atkins v. Bowen, 690 F. Supp. 383 (E.D. Pa. 1988). The defendant does allow retroactive service credit in cases where it can be shown that an administrative error prevented the employee from joining the pension plan. They were willing to hear the plaintiff's claim in this case despite the fact that the events in question occurred over 30 years ago. This fact undermines the defendant's argument that the passage of time precludes a fair adjudication. Second, the plaintiff was not represented by a lawyer and was not informed of his right to appeal the decision of the N.Y.C. pension board in 1956. These are relevant factors for consideration in determining whether to exercise equitable discretion. Cann v. Carpenters Pension Trust for Southern California, 662 F. Supp. 501, 510 (C.D. Cal. 1987) (lack of diligence in pursuing pension claim mitigated by fact plaintiff was unrepresented by lawyer and uninformed of rights of appeal). Today a full and fair review of a claim requires pension plan administrators to inform claimants who have had an application for benefits rejected of their rights of appeal. 29 C.F.R. § 2560.503-1(f) (1987). See also Wolfe v. J.C. Penney Co., 710 F.2d 388, 391-392 (7th Cir. 1983) (requirements are mandated by ERISA even where regulations are inapplicable).
ERISA is the source of these rules, but the principles are applicable to pre-ERISA cases as well. It would be unfair to bar plaintiff's claim simply because he wrote a letter to the plan administrator in 1956 asking whether he was entitled to his service credit. For these reasons, I find that the plaintiff's claim is not barred by laches.
Review of the Committee Decision
Before turning to the question of whether the defendant acted in violation of ERISA, it is necessary to resolve the issue of what standard of review applies to decisions of pension plans to deny benefits. As the Third Circuit Court of Appeals has recognized, the weight of authority is that the denial of a claim for benefits must be reviewed under an arbitrary and capricious standard. Bruch v. Firestone Tire and Rubber Co., 828 F.2d 134, 138 (3d Cir. 1987), cert. granted, 485 U.S. 986, 108 S. Ct. 1288, 99 L. Ed. 2d 498 (1988). In Bruch, however, the Court of Appeals specifically declined to apply the arbitrary and capricious standard and instead reviewed the decision of a plan administrator de novo. The plaintiff argues that he too is entitled to have the defendant's decision reviewed de novo by this court. Defendant takes the position that Bruch is inapplicable and that their decision can only be overturned if found to be arbitrary and capricious.
In Bruch, the plaintiffs were three classes which in total represented over 500 formerly salaried employees of the plastics division of Firestone Tire and Rubber Company. Firestone sold its plastics division to the Occidental Petroleum Corporation, and most of the employees later accepted positions with Occidental. The plaintiffs claimed that (1) the sale of the division triggered a right to severance benefits; (2) employees who elected early retirement after the sale were entitled to full pre-sale benefits; (3) the sale of the division triggered vesting of employee stock option rights; and (4) the employees were entitled to obtain information about benefits from their former employer.
The key to Bruch is the Court of Appeals' valid concern that pension plan administrators cannot always be trusted to act impartially. The arbitrary and capricious standard was adopted from pension plans established under § 302(c) of the Labor Management Relations Act (LMRA), 29 U.S.C. § 186(c)(5). However, LMRA plans require equal employee and employer representation in plan administration. The decisions of these plans was, therefore, likely to be unbiased. In contrast, the plans at issue in Bruch were controlled entirely by company personnel. Furthermore, the Bruch plans were unfunded. Any expenditure would have come directly out of the company's pocket. The conflict of interest was obvious, and the arbitrary and capricious standard made little sense under the circumstances. The court instead applied the law of trusts which states that "when a trustee is thought to have acted in his own interest and contrary to the interest of the beneficiaries, his decisions are to be scrutinizd with the greatest possible care." Bruch, 828 F.2d at 145. Thus, when there is reason to believe a plan administrator cannot be impartial, de novo review is appropriate.
Whether the arbitrary and capricious or de novo standard applies depends on the context of the case. Bruch, 828 F.2d at 140. When an individual claim for benefits is in dispute, as opposed to the potentially huge liability at question in Bruch, the Court of Appeals has indicated that the arbitrary and capricious standard is still applicable. In Shiffler v. Equitable Life Assurance Soc'y, 838 F.2d 78 (3d Cir. 1988), the Court of Appeals used the arbitrary and capricious standard to review the denial of pension benefits to a widow who was suing for benefits due from the death of her husband. The Court stated:
We recognize that in Bruch the arbitrary and capricious standard was not applied but we do not understand that case necessarily to apply in a situation such as this involving "personal claims for benefits," see Struble [v. New Jersey Brewery Employees' Welfare Trust Fund], 732 F.2d  at 333 [(3d Cir. N.J. 1984)], even though it could hardly be said that Equitable is disinterested in this matter. Equitable is disinterested in this matter. (referring to Struble v. New Jersey Brewery Employees' Welfare Trust Fund, 732 F.2d 325 (3d Cir. 1984)).