option and the execution of the spousal consent form by Linda Jordan on July 24, 1989, so it is difficult to perceive any prejudice to plaintiff flowing from any untimeliness under ERISA or the Treasury Regulations.
Were it timely, the next question would be whether this notice and explanation was adequate in light of the "failure" to specifically inform plaintiff and his spouse that their election of benefits and designation of joint annuitant would be irrevocable, either by the June 5th notice/explanation or through a previous summary plan description required by section 102, 29 U.S.C. § 1022. This presents a closer question.
Neither ERISA, the Internal Revenue Code, nor Treasury Regulations specifically requires plan fiduciaries to notify participants and beneficiaries that their election between the various available options is irrevocable as is their designation of joint annuitant if they elect a joint and survivor annuity option. Plaintiffs argue, however, that such specific information is required by the penumbras of various sections of ERISA and the regulations, including ERISA's requirement that plan fiduciaries provide "summary plan descriptions" to participants and beneficiaries which shall include specific information described in § 102(b), 29 U.S.C. § 1102(b), "shall be written in a manner calculated to be understood by the average plan participant, and shall be sufficiently accurate and comprehensive to reasonably apprise such participants and beneficiaries of their rights and obligations under the plan." Section 102(a)(1), 29 U.S.C. § 1102(a)(1). The specific information required to be contained in a summary plan description includes "the plan's requirements respecting eligibility for participation in benefits [and] circumstances which may result in disqualification, ineligibility, or denial or loss of benefits. . . ." Section 102(b), 29 U.S.C. § 1102(b).
Section 205, 29 U.S.C. § 1205, sets forth the "Requirements of Joint and Survivor Annuity and Preretirement Survivor Annuity" and establishes the plan's disclosure obligations with regard to such annuities. Section 205 states, "Each pension plan . . . shall provide that -- (1) in the case of a vested participant who does not die before the annuity's starting date, the accrued benefit payable to such participant shall be provided in the form of a qualified joint and survivor annuity . . . ." 29 U.S.C. § 1205(a)(1). A plan meets the requirements of Section 205 only if under the plan, each participant "(i) may elect at any time during the applicable election period to waive the qualified joint and survivor annuity form of benefit . . ., and (ii) may revoke any such election at any time during the applicable election period . . . ." Section 205(c)(1)(A)(i) and (ii), 29 U.S.C. § 1205(c)(1)(A)(i) and (ii). Additionally, each plan is required to provide to each participant "within a reasonable period of time before the annuity's starting date (and consistent with such regulations as the Secretary of the Treasury may prescribe)" a written explanation regarding the terms and conditions of the qualified and joint survivor annuity and the election, waiver and revocation of benefits, the elements of which were detailed above.
Plaintiff would have this Court declare the "irrevocability" of elections of benefits and designations of joint annuitants to be material information which retirement plans must provide to all participants prior to commencement of retirement benefits even without specific request for such information from a participant, although "irrevocability" is not among the specifically enumerated items of mandatory disclosure set forth in the comprehensive statutory and regulatory scheme.
The Court declines to resolve these issues, because, even assuming that the June 5, 1989, notice and explanation of benefits options was untimely, and that the Pension Plans failed to disclose material information regarding "irrevocability" of election/designation, either in a summary plan description or otherwise, such nondisclosure does not give rise to any recognized ERISA cause of action under the circumstances and record presented by plaintiff.
There is no doubt that, although participants and beneficiaries are foreclosed from seeking relief for a breach of fiduciary duties "under the terms of a plan" with regard to ERISA's reporting and disclosure obligations pursuant to section 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B), Hozier, they may pursue the avenue of "appropriate equitable relief" provided in section 502(a)(3), 29 U.S.C. § 1132(a)(3). Bixler v. Central Pennsylvania Teamsters Health & Welfare Fund, 12 F.3d 1292 (3d Cir. 1993).
"Appropriate equitable relief" includes monetary awards typically available in equity, such as specific performance, restitution and reimbursement for back benefits, but does not include "legal" monetary awards for compensatory or consequential damages. In re Unisys Corp., 57 F.3d 1255, 1268-69 (3d Cir. 1995) (interpreting Mertens v. Hewitt Assoc., 508 U.S. 248, 113 S. Ct. 2063, 124 L. Ed. 2d 161 (1993), as prohibiting, under section 502(a)(3), monetary awards of a "legal" nature only, but not monetary awards normally available at equity).
The Court of Appeals for the Third Circuit has "repeatedly held that under ordinary circumstances defects in fulfilling the reporting and disclosure requirements of ERISA do not give rise to a substantive remedy other than that provided for in section 502(a)(1)(A) of that Act. . . ."
Ackerman v. Warnaco, Inc., 55 F.3d 117, 124 (3d Cir. 1995) (citations omitted). Whether framed in the language of "appropriate equitable relief" pursuant to 502(a)(3) or "equitable estoppel," "extraordinary circumstances" are the sine qua non for any relief from a fiduciary's failure to comply with ERISA's reporting or disclosure obligations. "Such circumstances include situations where the employer has acted in bad faith, or has actively concealed a change in the benefit plan, and the covered employees have been substantively harmed by virtue of the employer's actions." Id. at 55 F.3d 125 (citations omitted).
Reviewing the applicable precedent of our Court of Appeals, nothing short of demonstrable bad faith, affirmative misrepresentation or concealment of ERISA pension benefits or rights with knowledge that the participants or beneficiaries might be misled has sufficed to demonstrate the necessary "extraordinary circumstances." See e.g., Ackerman, 55 F.3d at 124 (reversing district court's grant of summary judgment in employer's favor, and concluding that a reasonable factfinder could infer that the employer "actively concealed the change to its severance policy in order to prevent employees at the Altoona plant from leaving"; however, violation of summary plan description disclosure obligations did not give rise to cause of action under 502(a)(3) nor does noncompliance alone constitute "extraordinary circumstances"); In re Unisys, 57 F.3d at 1264 ("Our decisions . . . firmly establish that when a plan administrator affirmatively misrepresents the terms of a plan or fails to provide information when it knows that its failure to do so might cause harm, the plan administrator has breached its fiduciary duty to individual plan participants and beneficiaries. . . . This claim is distinct from a claim for benefits under the terms of the plan because it requires different proof (proof of fiduciary status, misrepresentations, company knowledge of the confusion and resulting harm to the employees) than would be required for a contract claim. . . ."); Curcio v. John Hancock Mutual Life, Ins. Co., 33 F.3d 226 (3d Cir. 1994) (reversing grant of summary judgment in favor of employer acting in its fiduciary capacity, pursuant to section 502(a)(3)(B), "appropriate equitable relief," on breach of fiduciary duty and equitable estoppel theories for making affirmative misrepresentations with knowledge beneficiary would be misled thereby, and stating that to "succeed under this [equitable estoppel] theory of relief, an ERISA plaintiff must establish (1) a material misrepresentation, (2) reasonable and detrimental reliance upon the representation, and (3) extraordinary circumstances." The Court of Appeals concluded employer breached its fiduciary duties, affirmatively misled the beneficiary and her participating spouse, and awarded the beneficiary an additional $ 150,000 on a supplemental accidental death and dismemberment policy that the participant spouse would have opted to purchase had he known all of the material facts); Bixler, 12 F.3d at 1301-03 (recognizing a cause of action for a breach of fiduciary duty in failing to provide relevant information under section 502(a)(3) of ERISA, where the fiduciary had knowledge that its failure to provide the participant and/or his beneficiaries with complete and accurate information would mislead them as to the coverages in effect); Gillis v. Hoechst Celanese Corp., 4 F.3d 1137, 1142-43 (3d Cir. 1993) ("When a plaintiff asserts an equitable estoppel claim based on an ERISA reporting and disclosure violation, the plaintiff must satisfy more than simply the 'ordinary elements' of equitable estoppel." Plan administrator's failure to distribute information regarding employer's separation pay policy was insufficient to satisfy even ordinary elements of equitable estoppel, i.e., material misrepresentation, reasonable reliance on said misrepresentation, and damages, and offered no evidence that they were victims of "extraordinary circumstances" that would provide them a remedy for failure to comply with ERISA's reporting and disclosure requirements); Gridley v. Cleveland Pneumatic Co., 924 F.2d 1310, 1318-19 (3d Cir. 1991), cert. denied, 501 U.S. 1232, 115 L. Ed. 2d 1023, 111 S. Ct. 2856 (1991) (even were summary plan description defective in falling to provide material information, payment of increased life insurance benefits would not constitute appropriate equitable relief in the absence of "extraordinary circumstances"); Genter v. Acme Scale and Supply Co., 776 F.2d 1180 (3d Cir. 1985) (failure of plan to provide a clear and plain statement of hidden pension benefits which were available to some employees, but not to the uninformed, under circumstances where the plan discriminated against those not informed, was a breach of fiduciary duties to fully and adequately inform all of its employees of the full extent of their available benefits; additional insurance coverage in beneficiary's favor awarded).
Assuming that plaintiff could establish on this record the "ordinary elements" of equitable estoppel, including that the Pension Plans had made a material representation or omission,
there is nothing extraordinary about the plan's untimely and inadequate disclosure, or rather nondisclosure of the irrevocability of plaintiff's election/designation. There are no allegations or evidence of bad faith on the part of any of the plan administrators, no hidden benefits that were available to some but not all plan participants, no affirmative misleading on the part of the administrators, and no actual knowledge that plaintiff was ignorant of the irrevocability of said elections/designation. Moreover, there is no hint that the Pension Plans' administrators had any inkling plaintiff was contemplating a divorce which might trigger a change of heart as to the joint annuitant at some time in the future. The "law is clear that the plan summary is not required to anticipate every possible idiosyncratic contingency that might affect a particular participant's or beneficiary's status." Lorenzen v. Employees Retirement Plan of the Sperry and Hutchinson Co., 896 F.2d 228, 236 (7th Cir. 1990).
"Absent a specific participant-initiated inquiry, a plan administrator does not have any fiduciary duty to determine whether confusion about a plan term or condition exists. It is only after the plan administrator does receive an inquiry that it has a fiduciary obligation to respond promptly and adequately in a way that is not misleading." Switzer v. Wal-Mart Stores, Inc., 52 F.3d 1294, 1299 (5th Cir. 1995), citing Electro-Mechanical Corp. v. Ogan, 9 F.3d 445, 452 (6th Cir. 1993). See also Kreutzer v. A.O. Smith Corp., 951 F.2d 739, 743 (7th Cir. 1991), citing, inter alia, Berger v. Edgewater Steel Co., 911 F.2d 911 (3d Cir. 1990) ("An employer's procedural violations of ERISA entitle employees to monetary relief only in exceptional cases. . . . Most courts that have considered the issue have held that the employer must have acted in bad faith, actively concealed the benefit plan, or otherwise prejudiced their employees by inducing their reliance on a faulty plan summary before recovery for procedural violations is warranted.").
Thus, in the absence of allegations and proof of such extraordinary circumstances, even if defendants technically breached their fiduciary duties by falling to timely disclose material information regarding irrevocability of election of benefits and designation of joint annuitants (as to which this Court expresses no opinion), plaintiff has failed to state a claim under ERISA's section 502(a)(3), 29 U.S.C. § 1132(a)(3), as the jurisprudence of this Circuit makes quite clear. Accordingly, this Court must grant summary judgment in defendants' favor on Counts I, II and III of plaintiff's complaint.
Count IV purports to set forth a claim of "unjust enrichment" because defendants are paying plaintiff a reduced monthly benefit for the joint and survivor annuity option (as compared with the straight life option) without any joint annuitant designated, given the extinguishment of Linda E. Jordan's rights as joint annuitant pursuant to the QDRO. It is extremely unlikely that a federal common law claim of "unjust enrichment" is available to a participant or beneficiary who otherwise has comprehensive statutory causes of action and remedies under section 502, and so far a claim for "unjust enrichment" has only been recognized for employers or pension funds to recover mistakenly paid contributions where ERISA provided such a right without an explicit remedy. See Plucinski v. I.A.M., National Pension Fund, 875 F.2d 1052 (3d Cir. 1989); Luby, 944 F.2d at 1187; Travitz v. Northeast Dept. ILGWU Health and Welfare Fund, 818 F. Supp. 761, 765 (M.D. Pa. 1993). Our court of appeals has cautioned "that the district courts should not easily fashion additional ERISA claims . . . under the guise of federal common law." Curcio, 33 F.3d at 235, citing Plucinski, 875 F.2d at 1056. Summary judgment, therefore, also is appropriate on Count IV of plaintiff's complaint.
The Court notes that defendants have offered to reinstate Linda E. Jordan as the joint annuitant on plaintiff's retirement account which, although not the solution plaintiff desires, is nevertheless a valuable right which would undermine any claim of unjust enrichment to the plan. Defendants have represented to the Court that this offer remains open to plaintiff. Accordingly, the Court will direct defendants to keep this offer open for a reasonable period of time to permit plaintiff to exercise this option to reinstate Linda E. Jordan as his joint annuitant.
An appropriate order will follow.
ORDER OF COURT
AND NOW, this 18th day of January, 1996, it is hereby ORDERED AS FOLLOWS:
(1) Plaintiff's Motion for Summary Judgment and for Injunctive, Declaratory and Monetary Relief (Document No. 13) is DENIED;
(2) Defendants' Motion for Summary Judgment (Document No. 16) is GRANTED, and summary judgment is entered on all counts in favor of defendants;
(3) Defendants are directed to reinstate Linda E. Jordan as plaintiff's joint annuitant on his joint and survivor annuity option in the event plaintiff notifies the Federal Express Corporation Employees' Pension Plan in writing of his intention to reinstate Linda E. Jordan as his joint annuitant on or before March 18, 1996.
Donald J. Lee
United States District Judge