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Battoni v. IBEW Local Union No 102 Employee Pension Plan

February 5, 2010

CLEMENT BATTONI, JR.; RAYMOND GIULIANO; JAMES W. VREELAND; RAYMOND S. DEMARCO, JR.; MARK F. SHUBIAK; NEIL BATTONI; CHARLES R. WALLER, APPELLEES IN 08-3743 AND 09-2030 CROSS-APPELLANTS IN 08-3924
v.
IBEW LOCAL UNION NO 102 EMPLOYEE PENSION PLAN; IBEW LOCAL UNION NO 102 EMPLOYEE WELFARE FUND; JOHN E. MCHUGH; RICHARD D. LESSNER; LEWIS S. WEINSTOCK; ALAN M. GOLUB; REGINA DELESKY; JOHN DOES 1-10; JANE DOES 1-10; TRUSTEES OF THE IBEW LOCAL UNION NO 102 EMPLOYEE PENSION PLAN AND / OR THE IBEW LOCAL UNION NO 102 EMPLOYEE WELFARE FUND, AS TRUSTEES AND INDIVIDUALLY, APPELLANTS IN 08-3743 AND 09-2030 CROSS-APPELLEES IN 08-3924



On Appeal from the United States District Court for the District of New Jersey District Court No. 2-05-cv-00934 District Judge: The Honorable Faith S. Hochberg.

The opinion of the court was delivered by: Smith, Circuit Judge.

PRECEDENTIAL

Argued January 12, 2010

Before: SCIRICA, Chief Judge, BARRY, and SMITH, Circuit Judges.

OPINION

This appeal requires us to consider the scope of the Employee Retirement Income Security Act's ("ERISA") Anti-Cutback rule, 29 U.S.C. § 1054(g). Certain current and retired members of a union (the "Battoni Plaintiffs") challenged an amendment to their welfare plan (the "Disputed Amendment") as an unlawful cutback of their accrued benefits under their pension plan. We must determine whether the Disputed Amendment, which conditions receipt of healthcare benefits under a welfare plan on non-receipt of an accrued benefit under a pension plan, violates the Anti-Cutback rule. In light of ERISA's statutory text and our precedent, we conclude that the Disputed Amendment violated the Anti-Cutback rule by constructively amending the pension plan in a manner that decreased an accrued benefit under that plan. Accordingly, we will affirm the District Court's judgment in favor of the Battoni Plaintiffs.

I.

A.

In November 1999, the Local 675 and the Local 102 chapters of the International Brotherhood of Electrical Workers ("IBEW") merged. As a result of the merger, the Local 675 chapter was dissolved and its members were transferred to the Local 102 chapter. The chapters' pension and welfare plans were also combined.

Before the merger, the Local 675 Pension Plan permitted plan participants to choose between a lump sum pension benefit or a periodic monthly benefit. The Local 102 Pension Plan, on the other hand, provided only a periodic monthly benefit to its participants. After the merger, the two pension plans were combined into one-the Local 102 Pension Plan. To accommodate the lump sum pension benefit option that was included in the Local 675 Pension Plan, the Local 102 Pension Plan was amended to provide former Local 675 members the right to receive a lump sum benefit for pre-merger accruals. Post-merger accruals, however, could be applied only towards a periodic monthly benefit.

The chapters' welfare plans were combined by transferring the Local 675 members to the Local 102 Welfare Plan. That plan provided eligible retirees healthcare benefits for themselves and their spouses. To receive these benefits, a retiree was required to satisfy certain conditions outlined in the plan. Shortly after the merger, the Local 102 Welfare Plan was amended to include a new condition on the receipt of healthcare benefits. This amendment, the Disputed Amendment, conditioned a retiree's receipt of healthcare benefits on the retiree's not choosing the lump sum pension benefit offered under the Local 102 Pension Plan. The Disputed Amendment stated, in relevant part, that:

Retired employees who elect a lump sum pension benefit in lieu of periodic monthly benefits from [the] IBEW Local 102 Pension Plan and/or from another Local Union IBEW Pension Plan shall not be eligible for continued [healthcare] coverage.

Before the addition of the Disputed Amendment, a former Local 675 member could elect to receive the lump sum pension benefit provided under the Local 102 Pension Plan and still receive ...


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