The opinion of the court was delivered by: Goldberg, J.
Plaintiff alleges a violation of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001-1464, asserting that Defendants incorrectly calculated her benefits under her former husband, Bryn Lindenmuth's retirement plan, referred to as the PPL Retirement Plan ("the Plan"). Specifically, Plaintiff claims that the Qualified Domestic Relations Order ("QDRO") entered into pursuant to her 2005 divorce from Lindenmuth entitles her to a share of his benefits under the Plan's "GP401 Separation Policy" ("Separation Policy").
The parties have filed cross motions for summary judgment. Because we find that the QDRO does not entitle Plaintiff to a portion of the Separation Policy benefit, Plaintiff's motion will be denied and Defendants' motion granted.
The facts of this case are largely undisputed. Plaintiff was married to Bryn Lindenmuth, who worked for PPL from September 20, 1976, until March 3, 2009. (Def.'s Stat. of Facts ¶ 2.) As a benefit of Mr. Lindenmuth's employment, he participated in an ERISA defined benefit pension plan. (Id., ¶ 3.) In 2005, Plaintiff and Mr. Lindenmuth divorced, and as part of their divorce settlement, entered into a QDRO that designated Plaintiff as an "Alternate Payee," entitling her to receive a portion of Mr. Lindenmuth's retirement benefits under the Plan. (Id., ¶¶ 4-6.) The QDRO was approved by PPL on July 11, 2005, and provides, in relevant part:
The Alternate Payee will receive a benefit from the Plan in the form set forth in Paragraph 6, commencing on the date set forth in Paragraph 7, that is the actuarial equivalent of 53% of the present value of Participant's accrued benefit in the Plan determined as of December 20, 2004.
For purposes of this Paragraph, the Participant's accrued benefit shall be determined in accordance with the terms of the Plan, including the applicable assumptions for actuarial equivalence as set forth in the Plan, but without taking into account the value of any subsidy in the Plan for early retirement benefits, or any increases or adjustments to Participant's accrued benefit under the Plan following Participant's separation from service.
If payments to the Alternate Payee commence while the Participant is still employed, the payment is to be computed as if the Participant had retired on the date on which payments to the Alternate Payee commence (but taking into account only the value of the benefits actually accrued and not taking into account the present value of any subsidy in the Plan for early retirement benefits). If Participant subsequently retires prior to the attainment of age 65, the amount payable to Alternate Payee shall be recalculated to include 53% of the value of any employer subsidy for early retirement. (QDRO, ¶ 5, Administrative Record at G000041 (emphasis added).)
A participant's normal "accrued benefit" under the Plan is expressed as a monthly payment beginning at the normal retirement age of sixty-five. (Def. Stat. of Facts, ¶ 12.) The Plan, however, permits participants to begin receiving benefits prior to their normal retirement age, as early as the month following their fifty-fifth birthday. (Id., ¶ 17.) If participants elect to begin receiving their benefits "early," the monthly payment is actuarially reduced to account for the fact that payments start sooner, and are paid longer. (Id., ¶ 15.)
Some retirement plans will "subsidize" early retirement benefits in certain circumstances. That is, a participant may begin receiving retirement benefits early and those benefits will be greater than the actuarial equivalent of his or her normal retirement benefits. See 26 C.F.R. § 1.411(d)-3(g)(6)(v). The difference between the monthly benefit actually received and the actuarial equivalent of the normal retirement benefit is the value of the "subsidy." See id. Where the early retirement benefit equals the normal retirement benefit, it is referred to as "fully subsidized." See, e.g., Aldridge v. Lily-Tulip, Inc., 953 F.2d 587, 589 (11th Cir. 1992); Walker v. Monsanto Co. Pension Plan, 636 F.Supp.2d 774, 778 (S.D. Ill. 2009). Otherwise, it is only "partially subsidized." As discussed in detail below, the Plan at issue contains benefits that subsidize early retirement benefits.
The QDRO permitted Plaintiff to begin receiving her share of the Plan benefits early, without regard to whether her husband had elected to begin receiving benefits or continued to work at PPL. (Def. Stat. of Facts, ¶ 18; QDRO, ¶ 5.) Under the QDRO, if Plaintiff elected to receive early benefits, her payment would be limited to the actuarial value of the normal retirement benefit that had accrued as of December 20, 2004. (QDRO, ¶ 5.) However, if Mr. Lindenmuth also retired prior to the age of sixty-five, the QDRO provides that Plaintiff's benefit would be "recalculated to include 53% of the value of any employer subsidy for early retirement." (Id.)
In August 2006, Mr. Lindenmuth turned fifty-five years old, and Plaintiff elected to begin receiving benefits the following month. (Def. Stat. of Facts, ¶¶ 21-22.) Plaintiff's monthly payment was equal to 53% of the actuarial equivalent of the normal retirement benefit that Mr. Lindenmuth had accrued as of December 20, 2004. (Id., ¶ 26.) She did not receive the value of any subsidy because her husband continued to work for PPL.
In March 2009, Mr. Lindenmuth's employment with PPL was terminated because of a "company-wide reduction in force," and he began receiving retirement benefits. (Def. Stat. of Facts, ¶ 28.) At that time, he was fifty-seven years old and had worked for PPL for thirty-two years. (Id., ¶ 29.) In addition to the actuary equivalent of his accrued normal retirement benefit, Mr. Lindenmuth received two additional benefits under the Plan: a "Schedule B" benefit for retirees with at least twenty years of service, and a benefit under the Separation Policy. Under Schedule B, based solely upon his age and length of employment with PPL, Mr. Lindenmuth was eligible to receive 80.7% of his normal, age sixty-five retirement benefit. (Id., ¶ 30.) Under the Separation Policy, Mr. Lindenmuth was entitled to an enhanced, fully subsidized benefit.
Mr. Lindenmuth therefore received his normal monthly retirement benefit following his termination at age fifty-seven. (Id., ¶ 33.) Because Mr. Lindenmuth began receiving retirement benefits before he turned 65, Plaintiff's payment was recalculated to include 53% of Mr. Lindenmuth's Schedule B subsidy for early retirement. However, the Plan determined that Plaintiff was not entitled to any portion of the Separation Policy ...