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Shopmen's Local Union No. 527 Pension and Benefit Funds v. T. Bruce Sales

February 6, 2007

SHOPMEN'S LOCAL UNION NO. 527 PENSION AND BENEFIT FUNDS, SHOPMEN'S LOCAL UNION NO. 527, AND DAVID E. HARRISON, PLAINTIFFS,
v.
T. BRUCE SALES, INC., DEFENDANT.



The opinion of the court was delivered by: Ambrose, Chief District Judge.

OPINION and ORDER OF COURT

SYNOPSIS

In this civil action, Plaintiffs are a pension fund, union, and an individual employee of Defendant, who is also a member of Plaintiff union and a participant in Plaintiff fund. Plaintiffs claim that a provision in the pension fund documents was included by mistake, and violates the anti-cutback rule of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1054(g)(1), and therefore that Plaintiff Employee is entitled to recover lost wages or benefits suffered as a result of the violation.*fn1

Before the Court are the parties' Cross-Motions for Summary Judgment. For the following reasons, Defendant's Motion will be granted, and Plaintiff's denied.

I. FACTS

Only the import of the facts, and not the material facts themselves, are in dispute.*fn2 Unless otherwise indicated, therefore, the following facts are undisputed.

The Trustees of Shopmen's Local Union No. 527 Pension and Benefit Funds ("Trustees") administer a pension fund (the "Plan"), which is an employee benefit plan within the meaning of ERISA, and which involves certain employers who have collective bargaining relationships with the Plaintiff Union. The Plaintiff Union represents certain employees of Defendant; Defendant is a contributing employer to the Plan. The Plaintiff Union and Defendant are parties to a collective bargaining agreement ("CBA"). Plaintiff Employee is an employee of Defendant, a member of Plaintiff Union, and a Plan participant.

Since 1957, the Plan has provided retirement and disability benefits to employees of employers who had collective bargaining relationships with the Plaintiff Union. Plaintiff Union and participating employers entered into an Amended Agreement and Declaration of Trust ("Agreement"), which provides that the Plan shall be administered by the Trustees. It further states that the Trustees will establish rules and regulations to administer the Plan pursuant to the terms of the Agreement. Those rules and regulations are set forth in a Pension Plan Document ("Plan Document"), which is distributed to participating employers and employees. Under the terms of the Agreement, the Plan's purpose is to receive contributions and to provide benefits for eligible employees. The parties' CBA incorporates by reference the Agreement, the Plan, and the Plan Document. The Pension Plan Rules and Regulations, however, are not necessarily controlled by the terms of the CBA. No incorporating language regarding the CBA is included in the Pension Fund Rules and Regulations. All benefit improvements under the Plan document are communicated to members and a copy of all benefit improvements are sent to all employer participants in the Plan.

Under the original terms of the Plan Document, an employee was required to reach normal retirement age, defined as 65 years old, and also separate from service with a contributing employer, in order to be considered retired and be eligible for benefits.

In 1983, the Plan was amended to allow employees to retire, work less than full time, and receive benefits. Section 7.06 of the Plan Document, as so amended, provided as follows: (a) General Rule. To be considered retired, a Participant must have separated from service with any and all Contributing Employers.

(b) Exceptions. A Participant who has separated from his previous employment, as defined in paragraph (a), shall be considered retired notwithstanding subsequent employment or reemployment with a Contributing Employer for less than 40 hours in any month.

On November 16, 1998, the Trustees passed the following unanimous motion, as reflected in the meeting minutes:

MOTION, to allow people to work on and after age 62 and receive their pension payments. However, there will be no bridge payment for those people who are working and receiving pension benefits.

The Trustees subsequently amended the Plan Document, on August 24, 1999, to include the motion as part of ...


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