Monday, May 21, 2007

Williams v. Iron Workers Local No. 16 Pension Fund, et al. (Maryland U.S.D.C.) (Not Approved for Publication)

Signed May 2, 2007--Memorandum Opinion by Judge Andre M. Davis.

Ronald Williams ("Williams") brought this action against defendants pursuant to the Employee Retirement Income Security Act ("ERISA"), 29 USC § 1001, et seq., to challenege the denial of pension benefits.

The fund's existence predates the enactment of ERISA. Administration and management of the fund is by contract with specialists, with the Board of Trustees setting policies and procedures. The outcome of this case hinges on the proper interpretation and application of one of the Trustees' amendments to the plan. Defendants argue that although contributions were made on behalf of Williams over many years, he failed to vest or otherwise accrue entitlement to those benefits. Williams argues that he is eligible for a pension, albeit a reduced pension, under a 1972 pre-ERISA version of the pension plan. Under the 1972 version, a participant's entitlement to a pension would vest after he or she earned seven years of credit and at least a partial benefit was payable when he or she reached retirement age. If a participant failed to work sufficient hours over a specified period to earn the requisite vesting credit, the participant would not vest and all potential benefits would be subject to forfeiture based on the relevant "break-in-service" rules.

Consequent to an amendment in the vesting schedule, the graduated vesting schedule maintained by the fund in 1972 was rescinded; instead, vesting occurred only after ten years of service. The issue then is whether when the trustees changed the vesting schedule to ten years, they did so before Williams had accrued sufficient vesting credit to gain an entitlement to benefits even under the pre-ERISA pension plan and whether Williams received proper notice of that amendment.

The gravamen of this dispute, therefore, is two-fold: (1) whether the amendment to the vesting schedule became effective on January 1, 1976 or only later, in November 1977, when the amendment to the vesting schedule was embodied in a formal printed restatement of the plan; and (2) whether Williams received notice of the fund's amendment to the vesting schedule in time for him to adjust his work plans so as to secure a pension benefit.

The Court rejected Williams' arguments relating to any potential benefits accrued before the amendment and found the defendants provided proper and sufficient notice of the amendment. Held that the Williams' motion for summary judgment denied and defendant's motion granted.

The full opinion is available in PDF.

No comments: