Bencivenga v. Western Pennsylvania Teamsters and Employers Pension Fund, 84-3654

• Decision Date: 03 July 1985
• Docket Number: No. 84-3654,84-3654
• Parties: 6 Employee Benefits Ca 1799 Columbo A. BENCIVENGA and Adeline Bencivenga, Appellants, v. The WESTERN PENNSYLVANIA TEAMSTERS AND EMPLOYERS PENSION FUND, and the Trustees Thereof.
• Court: U.S. Court of Appeals — Third Circuit

Page 574

763 F.2d 574

6 Employee Benefits Ca 1799

Columbo A. BENCIVENGA and Adeline Bencivenga, Appellants, v. The WESTERN PENNSYLVANIA TEAMSTERS AND EMPLOYERS PENSION FUND, and the Trustees Thereof.

No. 84-3654.

United States Court of Appeals Third Circuit.

Argued March 28, 1985.

Decided June 7, 1985.

Rehearing and Rehearing In Banc Denied July 3, 1985.

James C. Larrimer, argued, Dougherty, Larrimer & Lee, Pittsburgh, Pa., for appellants.

Charles J. Streiff, argued, Wick, Rich, Flue & Streiff, Pittsburgh, Pa., for appellees.

Before ALDISERT, Chief Judge, and SLOVITER and STAPLETON ^*, Circuit Judges.

OPINION OF THE COURT

ALDISERT, Chief Judge.

The question for decision in this appeal by a pension claimant from an adverse summary judgment in favor of a pension fund is whether the fund could properly reduce the amount of early retirement benefits during the period between the date of early retirement and the time benefits would become payable under the plan to an amount equal to the actuarial equivalent of normal retirement benefits. To decide this question we must interpret provisions of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. Sec. 1001 et seq., and two regulations of the Treasury Department. We agree with the district court's conclusion that trustees of a fund could reduce such benefits without violating the provisions of ERISA, and therefore affirm. For the most part, we are writing in a historical sense only, because, as will be later developed, Congress has now amended the ERISA statute in a manner that will have significant bearing on future claims of this kind. See infra notes 3 and 4.

I.

After working 29 years for Morris Paper Company, Columbo A. Bencivenga retired on March 5, 1979, at the age of 52. Under the terms of the Western Pennsylvania Teamsters Employees Pension Plan he would be eligible for an early retirement pension when he reached age 55. When he retired in 1979, the actuarial equivalent formula used by the plan to reduce normal retirement age benefits, payable at age 60, to that received at early retirement was " 1/3 of one (1) percent for each month that the Early Retirement Date precedes age sixty." When Bencivenga retired, he had more than the maximum 25 years of credited service and the unit multiplier in effect was $22.00. Under the Plan, his normal retirement benefit would have been $550.00 per month. Plan Sec. 4.4(b), reprinted in app. at 32. Using the 1/3 of one percent discount factor in effect at that time, Bencivenga anticipated an early retirement pension of $440.00 per month when he reached age 55.

On November 26, 1979, however, the trustees of the Plan amended the Plan to increase gradually the discount factor to 7/10 of one percent for each month the participant retired before age sixty. App. at 58. This was done to insure that the benefits paid to a participant retiring prior to the normal retirement age were equal in value to those that would be payable at the normal retirement age. When Bencivenga reached age 55 and applied for his pension, the trustees, using the new discount factor, approved a pension of only $319 per month. After unsuccessfully appealing the trustees' decision, Bencivenga and his wife Adeline, who was designated to receive joint and survivor benefits under the Plan, filed this action, alleging that the trustees' decision violated ERISA Sec. 204(g). Both sides moved for summary judgment. The district court determined that the benefits affected were not accrued benefits protected under ERISA. The court found that the trustees' actions should therefore be evaluated under either a "reasonableness" or "arbitrary and capricious" standard, and offered both parties the opportunity "to conduct discovery and file affidavits" on this issue. Although the fund filed supporting affidavits, the plaintiff did not. The court then entered summary judgment for the defendants. Bencivenga appeals. ¹

II.

Bencivenga raises two contentions in this appeal. First, he argues that a material issue of fact exists, because of which summary judgment was inappropriate. Second, he argues that defendant was not entitled to judgment as a matter of law because the early retirement benefits affected by the trustees' actions are protected from reduction by ERISA. On review of the first contention, we must decide whether the district court impermissibly resolved a disputed issue of material fact; on the second contention our review is plenary. Goodman v. Mead Johnson & Co., 534 F.2d 566, 573-74 (3d Cir.1976), cert. denied, 429 U.S. 1038, 97 S.Ct. 732, 50 L.Ed.2d 748 (1977).

III.

Appellant's first contention, that there was a genuine issue of material fact that precluded the issuance of summary judgment in favor of the fund, is at its worst, imprecise, and at best, unpersuasive. Appellant seems to argue that he can elect not to file any document to contest an affidavit of facts supporting the summary judgment motion, and then argue on appeal that his opponent's "affidavit, not subject to cross-examination by the beneficiary, should not be accepted by the court at face value." Brief for Appellant at 41. This is simply not the law. Under Rule 56(e), Federal Rules of Civil Procedure, a party resisting a summary judgment motion may not rest upon the mere allegations or denials of his pleading. Ness v. Marshall, 660 F.2d 517, 519 (3d Cir.1981). In opposing the motion, his response "must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him." Id. In the vernacular, you may not "lie doggo" in the summary judgment proceedings in the district court, and on appeal claim a defense on the facts.

On the other hand, appellant further complains that the district court "has not articulated the basic material facts" upon which the motion was granted. This, of course, is not necessary. In granting summary judgment, the district court assumes that all the factual averments contained in the papers before it are true. Smith v. Saxbe, 562 F.2d 729, 733 (D.C.Cir.1977).

Moreover, the district court was faced with cross motions for summary judgment and we are satisfied with its conclusion that the matter was ripe for summary judgment. ² We now turn to the merits.

IV.

In order to determine if the district court properly granted summary judgment, we must decide whether early retirement benefits are "accrued benefits" protected by ERISA. We look first to the plain language of the statute. ERISA Sec. 204(g), 29 U.S.C. Sec. 1054(g), and its tax counterpart, ERISA Sec. 1012(d)(6), 26 U.S.C. Sec. 411(d)(6), prohibit amending a pension plan to reduce a participant's "accrued benefits." The term is defined in ERISA Sec. 3(23), as "the individual's accrued benefit as determined under the plan and ... expressed in the form of an annual benefit commencing at normal retirement age...." 29 U.S.C. Sec. 1002(23). "Normal retirement age" is that specified in the plan, or the later date of attaining age 65 or 10 years participation in the plan. 29 U.S.C. Sec. 1002(24). Thus, in the context of "accrued benefits," ERISA's specific reference is to normal, rather than early, retirement. ³

ERISA's legislative history also indicates that the Act was not intended to assure the sanctity of early retirement expectations. The House Report states:

The term "accrued benefit" refers to pension or retirement benefits and is not intended to apply to certain ancillary benefits.... To require the vesting of these ancillary benefits would seriously complicate the administration and increase the cost of plans whose primary function is to provide retirement income.... Also, the accrued benefit to which the vesting rules apply is not to include such items as the value of the right to receive benefits commencing at an age before normal retirement age

....

Generally, an individual's "accrued benefit" under a defined benefit plan is to be expressed in the form of an annual benefit commencing at normal retirement age.

H.R.Rep. No. 807, 93d Cong., 2d Sess. 57, reprinted in 1974 U.S.Code Cong. & Ad.News 4639, 4670, 4726. Legislative history, therefore, supports the literal language of the Act.

Case law also supports the conclusion that early retirement benefits are not accrued benefits under ERISA. In Sutton v. Weirton Steel, 724 F.2d 406 (4th Cir.1983), a parent company, National Steel Corp., sold its Weirton Steel Division to a new company, Weirton Steel Corp., which was owned by the Division's employees. National agreed to retain responsibility for normal retirement benefits accrued before the sale. In addition to normal retirement benefits, National had provided employees unfunded early retirement benefits in the event of shutdown or layoff. The sales agreement made it clear that the sale would not trigger payment of early retirement benefits. Employees who would have been eligible for early retirement sued, alleging that denial of the early retirement benefits violated ERISA. The Court of Appeals for the Fourth Circuit held that early retirement benefits were an ancillary benefit not protected by ERISA and that they could be altered, or even eliminated, without violating ERISA. Id. at 410 (citing Fentron Industries v. National Shopmen Pension Fund, 674 F.2d 1300, 1306 (9th Cir.1982) (past service credits of non-vested participants are "ancillary" and may be canceled) and Fine v. Semet, 699 F.2d 1091, 1093 (11th Cir.1983) (ERISA does not require payment of early retirement--any right to such benefits must be found in individual agreements)).

Based on Sutton and other cases, i.e., Hernandez v. Southern Nevada Culinary & Bartenders Pension Trust, 662 F.2d 617, 619 (9th Cir.1981) (no vested right to receive retirement benefits before normal retirement age), and Petrella v. NL Industries, Inc., 529 F.Supp. 1357, 1365-66 (D.N.J.1982) (all employees not entitled to age 55 retirement simply because some...