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Susan M. Baker v. Pennsylvania Economy League

August 23, 2011

SUSAN M. BAKER,
PLAINTIFF,
v.
PENNSYLVANIA ECONOMY LEAGUE, INC. RETIREMENT INCOME PLAN, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Anita B. Brody, J.

MEMORANDUM

I. INTRODUCTION

Plaintiff Susan Baker brings suit against Defendants Pennsylvania Economy League, Inc. Retirement Income Plan ("Plan") and Steven T. Wray, Plan Administrator, under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001, et seq. for a determination of benefit rights (Count I), a breach of fiduciary duties (Count II), equitable relief in the form of restitution (Count III), and equitable injunctive relief based on a theory of equitable estoppel (Count IV). Jurisdiction is proper pursuant to 28 U.S.C. § 1331 and 29 U.S.C. §§ 1132(e) and (f). Defendants have moved to dismiss all counts of the Complaint. For the reasons set forth below, Defendants' motion to dismiss will be granted in part and denied in part.

II. BACKGROUND

Baker is currently 55 years old. She began work with the Pennsylvania Economy League ("PEL") on October 19, 1983, and was a full-time employee in the Central Division office until September 1, 2009. Since September 1, 2009, Baker has been a part-time employee of PEL.

As a PEL employee, Baker is a participant in the Plan. According to the Plan: [T]he employer shall have the right to amend this plan at any time to any extent that it may deem advisable. Such amendment shall be in writing, shall be authorized by action of the board of directors or the partners (as applicable), and shall be executed by the person designated in conjunction with this authorization.

Compl. Ex. A at 44. Pursuant to the Plan, if Baker were to retire at age 65, her monthly benefit would be $1,858.31. This amount is known as her "monthly accrued benefit." The Plan also has an early retirement provision that allows participants who have reached the age of 55 to retire immediately. However, those who retire at age 55 receive only the actuarial equivalent of their accrued benefit. Baker turned 55 on September 29, 2010. If she had retired then, her monthly benefit (the actuarial equivalent of her accrued benefit) would have been $929.16.

The Plan also has a "Rule of 90" provision: if the sum of a participant's age plus completed years of vesting service equals or exceeds 90 before the participant reaches his or her normal retirement age, the participant can retire without any actuarial reduction to the accrued benefit as of the date of retirement. Baker will not become eligible for a Rule of 90 pension until December 31, 2014. If Baker were to retire on that date, she would receive her full $1,858.31 monthly benefit.

In 1999, PEL restructured its retirement program. The PEL Board approved a proposal at its December 1, 1999 meeting that excluded from participation in the Plan those employees hired after 1999; although those hired before would continue as participants in the Plan and still accrue benefits under the Plan. The Board also adopted the following resolution:

RESOLVED, that the Pennsylvania Economy League, Inc. Retirement Income Plan be reviewed during 2009 with the intent that it be terminated at the end of than [sic] plan year and that if the Plan is so terminated, the Plan be amended effective December 31, 2009 to provide an unreduced early retirement benefit for any participant who has as of that date a minimum of ten years of vesting service and whose combined attained age and service totals 74 or greater ("Rule of 74"). The board shall pass appropriate resolutions at that time to accomplish this intent.

Compl. ¶ 15. Baker received a memorandum, dated December 6, 1999, regarding this resolution and the Rule of 74. The memorandum stated:

During 2009 the existing Retirement Income Plan will be reviewed with the intent that it be terminated at the end of that plan year. . . . In conjunction with the termination of the existing Retirement Income Plan, it is intended that the Plan be amended effective December 31, 2009 to provide an unreduced early retirement benefit for any participant who has as of that date a minimum of ten years of vesting service and whose combined attained age and vesting service totals 74 or greater ("Rule of 74").

Compl. Ex. B.

On August 2, 2002, the PEL Board resolved that "benefits will cease to accrue under the Plan as of December 31, 2009, and no benefits shall accrue under the Plan subsequent to December 31, 2009." Compl. ¶ 17. The Board also resolved that "the Plan be amended to reflect the cessation of accruals under the Plan as of December 31, 2009." Compl. ¶ 17. According to the minutes of the board meeting, both the Plan Administrator at the time, as well as a board member, referred to the 2002 resolutions as terminating the Plan.

On August 19, 2004, in response to an email inquiry from another PEL employee as to whether the Rule of 74 would take effect, the ...


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