Lynch v. JP Stevens & Co., Inc.
Decision Date | 14 February 1991 |
Docket Number | Civ. A. No. 88-2919. |
Citation | 758 F. Supp. 976 |
Parties | Joseph P. LYNCH, Plaintiff, v. J.P. STEVENS & CO., INC., Thomas C. Durst and the J.P. Stevens & Co., Inc. Pension Committee, Defendants. |
Court | U.S. District Court — District of New Jersey |
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Henry J. Daaleman, Westfield, N.J., for plaintiff.
Stephen N. Dermer, Lowenstein, Sandler, Kohl, Fisher & Boylan, Roseland, N.J., for defendants.
Plaintiff Joseph P. Lynch ("Lynch"), a former employee of defendant J.P. Stevens & Co., Inc. ("Stevens"), brought this action against defendants Stevens, Thomas C. Durst ("Durst") and the J.P. Stevens & Co., Inc. Pension Committee (the "Pension Committee") (Stevens, Durst and the Pension Committee are collectively referred to as the "Defendants," and Lynch and the Defendants are collectively referred to as the "Parties"). Jurisdiction is alleged pursuant to the Age Discrimination in Employment Act of 1967 (the "ADEA"), 29 U.S.C. § 624(a), and the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq.
Lynch filed his complaint (the "Complaint") on 29 June 1988. While the Complaint states three counts, the actions of the Defendants alleged therein are described throughout the Complaint and may be grouped into six categories. First, Lynch alleges the Defendants violated various provisions of ERISA in restructuring the Salaried Employees Retirement Salaried Plan (the "Salaried Plan") of which Lynch was a participant and in recapturing $112 million in assets deemed surplus. Second, Lynch alleges the early retirement incentive offered to corporate area employees (the "Window") who elected to retire by a designated date violated the ADEA. Third, Lynch alleges he was improperly denied Window benefits because he was in fact a corporate area employee. Fourth, Lynch alleges he was terminated from employment and not offered an alternative position within Stevens in violation of the ADEA and the Stevens personnel policy. Fifth, Lynch alleges the current Salaried Plan (the "On-Going Plan") has been inadequately funded since the restructuring and recapture. Finally, Lynch alleges the Defendants failed to provide him with information regarding the Window in violation of the procedural provisions of ERISA.
Lynch seeks as relief reinstatement to his former position at Stevens, back pay and benefits, and "compensatory and punitive damages for emotional stress, humiliation, and breach of expressed and implied contract." Complaint at 15-16. Lynch also apparently seeks injunctive relief "that Stevens salaried employees pension plan be fully funded" and attorneys' fees. Complaint at 15-16.1
The Defendants now move for summary judgment2 on the Complaint insofar as it relates to the restructuring of the Salaried Plan, to the recapture of assets deemed surplus and to Window Benefits.3 Because there is no genuine issue of material fact and because the restructuring of the Salaried Plan, the recapture of assets deemed surplus, the offering of the Window and the denial to Lynch of Window benefits did not as a matter of law violate ERISA or the ADEA, the Motion is granted.
Lynch was employed by Stevens on 1 April 1972 and was terminated on 15 January 1988 from a position as Administrative Manager for the International Division. Lynch Cert., ¶ 2. He was fifty-nine years old at the time of his discharge. Id.
Stevens established the Salaried Plan effective 1 January 1948. Defendants' Memorandum at 9; Opposition at 1. The Salaried Plan is a defined benefit pension plan for the benefit of eligible salaried employees. Defendants' Memorandum at 9; Opposition at 2. As such, the Salaried Plan provides fixed benefits to participants based on a benefit formula set forth in the Salaried Plan. See 1983 Plan at 10-25.4 In general, pension benefits are calculated based on each participant's compensation and period of covered employment with Stevens. Id. Pension benefits accrue during each participant's period of covered employment and become vested, or nonforfeitable, after ten years of accrual (or after five years of accrual effective 1 January 1989), and are generally paid in monthly installments upon normal retirement at age 65 or upon early retirement at age 55. Id.; Anderson Cert., ¶ 14. The Salaried Plan provides that all accrued benefits become vested upon its termination. 1983 Plan at 44.
Stevens is the sole contributor to the Salaried Plan. 1983 Plan at 34; Retiree Plan at 34; On-Going Plan at 34; Complaint at 8. Contributions by Stevens are determined based on actuarial calculations of the amount necessary to fund the obligations of the Salaried Plan. Id. From 1948 to the present, actuarial services for the Salaried Plan have been provided by George B. Buck Consulting Actuaries, Inc. ("Buck"). Anderson Cert., ¶ 7. As actuary, Buck is responsible for estimating the present value of future benefits to be paid by the Salaried Plan and for calculating the yearly contribution by Stevens based on a funding method which allocates to the current year a portion of the difference between the present value of future benefits and the current value of assets. Anderson Cert., ¶ 4.
Because the Salaried Plan provides defined benefits to participants and because Stevens is its sole contributor, Stevens bears the risk of the Salaried Plan's actual investment experience relative to actuarial predictions. Id. at ¶ 16. If the actuarial predictions for investment returns are lower than actual experience in a given year, Stevens is then required to make larger contributions to the Salaried Plan in subsequent years. Id. If, on the other hand, actuarial predictions prove too high, Stevens is permitted to decrease its contributions in subsequent years. Id. The funding method for the Salaried Plan and its investment earnings affect only the amount Stevens is required to contribute to the Plan. Id.
Under the terms of the Salaried Plan, the Investment Committee of the Stevens' Board of Directors (the "Investment Committee") has the authority to make investment decisions for...
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