Wilkins v. Mason Tenders Dist. Council Pension
| Decision Date | 21 April 2006 |
| Docket Number | Docket No. 05-2303 CV. |
| Citation | 445 F.3d 572 |
| Parties | Abraham WILKINS, Plaintiff-Appellant, v. MASON TENDERS DISTRICT COUNCIL PENSION FUND and the Trustees of the Mason Tenders District Council Pension Fund, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Second Circuit |
Robert J. Bach, New York, N.Y., for Plaintiff-Appellant.
Myron D. Rumeld, Proskauer Rose LLP (Russell L. Hirschhorn, on the brief), New York, N.Y., for Defendant-Appellee.
Before: CALABRESI, KATZMANN, and HALL, Circuit Judges.
Plaintiff-Appellant Abraham Wilkins worked in the construction industry over the course of four decades, and claims that because some of his employers underreported his earnings to his pension fund, he has not received all the retirement benefits to which that work entitled him. Wilkins argues, among other things, that it is the obligation of his pension fund, Defendant-Appellee Mason Tenders District Council Pension Fund, and its Board of Trustees (collectively, "the Fund"), to ensure, through audits or other means, that his employers submitted accurate records of his earnings. Further, he argues that the Fund's policy of requiring claimants to prove their entitlement to additional benefits when employers underreport (the "Policy") shifts its record-keeping duty to him in violation of the Fund's fiduciary duty under the Employee Retirement Income and Security Act (ERISA) of 1974, 29 U.S.C. § 1001 et seq. He also contends that the Fund's failure to publish this Policy in its Summary Plan Description ("SPD") violates ERISA.
We do not agree with Wilkins that the Fund violated its fiduciary duties when it failed to audit his employers during the years in question. We also find that ERISA does not prevent the Fund from requiring Wilkins to produce some proof that he performed work for which he did not receive credit before it awards him additional benefits. We do agree with Wilkins, however, that if the Fund intends plan participants to shoulder the burden of producing such proof, ERISA requires that notice to this effect be given to plan participants in the Fund's SPD. The Fund did not do so here, and we remand for a determination of whether Wilkins was prejudiced by this omission, and if he was, for a determination of the amount of benefits he is due.
The Fund, which is administered by the Mason Tenders District Council ("the District Council"), a labor organization, provides retirement benefits for members of Mason Tenders locals. Participants' pensions are funded through contributions by their employers. See 29 U.S.C. § 1002(37)(A). These employers, more than 2000 in number, are required by their collective bargaining agreements ("CBAs") with the District Council to contribute to the Fund based on their employees' "covered employment" — that is, based on work performed by the employees under an employer's contract with the union. The Fund's own records of union members' earnings in covered employment are derived principally from remittance reports submitted, along with contributions, by the employers.
As required by ERISA, the terms of the pension program are governed by a written plan. See 29 U.S.C. § 1102(a)(1). Under the terms of plan, the Fund pays benefits to its participants on the basis of the number of "pension credits" their covered employment qualifies them for. For work performed prior to 1967, one credit is earned for each $750.00 of gross wages of covered employment during a calendar year, and for work performed in and after 1967, one credit is earned for every 150 hours of covered employment in a calendar year. The Fund does not count fractional credits: that is, on the pre-1967 scale, a worker receives one credit for earnings from $750.00 to $1499.00, and two credits for earnings from $1500.00 through $2249.00.
Abraham Wilkins worked in the construction industry from the 1950s until the 1980s and belonged to a Mason Tenders Local, Construction & General Building Laborers' Local 47, during that time. Over the years, he worked for fourteen employers, including seven who had CBAs with the District Council. Between them, these seven employers made some contributions to the Fund on Wilkins's behalf for eleven years: 1956, 1957, 1958, 1959, 1960, 1961, 1962, 1963, 1964, 1965, and 1985. Wilkins was a member of at least three other unions, some of which had their own CBAs with some of these seven employers.
As the Supreme Court noted in Central States, Southeast & Southwest Areas Pension Fund v. Central Transport, 472 U.S. 559, 566-67, 105 S.Ct. 2833, 86 L.Ed.2d 447 (1985), when a pension fund relies on employer self-reporting to determine employers' liability to the fund, employers have an incentive to underreport. Funds can police the reporting practices of contributing employers through random audits, see id. at 570-71, 105 S.Ct. 2833, and the Fund does this, see Wilkins v. Mason Tenders' Dist. Council, No. 03-cv-1581, 2005 WL 783064, at *3, 2005 U.S. Dist. LEXIS 5845, at *13 (E.D.N.Y. Apr. 7, 2005). Still, random audits do not guarantee accurate reporting. In Wilkins's case, as the table below illustrates, there are significant variances between the earnings some of these seven employers reported to the Fund and the earnings they reported to the Social Security Administration ("SSA").
Not all of the shortfall between the third and fourth columns necessarily represents underreporting on the part of Wilkins's employers, however. Employers were only obligated to report Wilkins's earnings for covered employment — that is, for work performed in his capacity as a member of the Mason Tenders. And, as mentioned above, Wilkins was a member of three unions besides the Mason Tenders Local during the relevant period. The record shows that at least two of these employers — Well-Mixed Concrete and Alicer Contracting — also had CBAs with other unions to which Wilkins belonged. As a result, some or all of the discrepancy between earnings reported to the Fund and to the SSA by these employers (and any others with ties to Wilkins's other unions) could represent work that Wilkins performed for other unions.
Wilkins filed an application for pension benefits in 1998. In 1999, the Fund paid him a lump sum benefit of $429.21, which was based on pension credits earned in 1962, 1963, and 1965. Although the Fund had records of covered employment for other years, the earnings in those years were insufficient to qualify for pension credits.1
In 2001, Wilkins met with the Fund's Director, John Virga, and claimed additional benefits based on work not reflected in the Fund's records, but reflected in his SSA statement of earnings. Virga denied Wilkins's claim in a letter dated June 13, 2001, on the ground that the Fund could not determine whether those extra earnings represented covered employment. At that time, when participants sought benefits based on work not reported by employers, it was the practice of the Fund to require them to submit pay stubs (to show that the additional work was performed at the union hourly rate), unless the Fund had conducted a random payroll audit of the employer during the relevant period, and the audit records supported the benefits claim. This Policy on Crediting Hours of Employment in Delinquent Employer Contribution Situations ("Pay Stub Policy")...
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