Dennison v. Mony Life Retirement Income Security Plan for Employees
710 F.3d 741
| 7th Cir. | 2013Background
- ERISA class action where district court dismissed one claim and granted summary judgment on the other.
- Plaintiff challenged plan interpretation and sought discovery into potential conflict of interest.
- Plaintiff left MONY in 1996; RISPE and Excess Plan were the two defined-benefit plans involved.
- RISPE provided a lower PBGC segment-rate-based discount and the Excess Plan used 7.5% discount; plaintiff opted for lump-sum benefits at eligibility in 2009.
- Pension Protection Act of 2006 allowed retroactive rate increases with ceilings for tax-qualified plans; RISPE could retroactively increase rate under amendment, subject to anti-cutback; Excess Plan not tax-qualified.
- Court reviewed de novo whether lump sums could be retroactively reduced and whether discovery into conflicts was appropriate; affirmed district court’s decision.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the lump-sum discount rate for RISPE/Excess Plan was correctly determined. | Plaintiff argues PBGC rate (lower) should govern lump sums. | MONY used segment rate and 7.5% for Excess Plan; RISPE also tied to segment rate; plan language supports retroactive amendment. | Yes; discount rates as applied were correct under plan terms. |
| Whether retroactive rate increases under the RISPE violated ERISA anti-cutback and were permissible under the Pension Protection Act. | Retroactive increase would violate anti-cutback. | Pension Protection Act permits certain retroactive rate increases; ceiling applies to tax-qualified plans. | Permissible under PPA and plan terms; anti-cutback constraint limited by statute. |
| Whether the lump-sum benefit (Excess Plan) falls within Accrued Benefit or is alterable by retroactive amendment. | Accrued Benefit includes lump-sum option and cannot be retroactively reduced. | Accrued Benefit is annuity; lump sum is a Retirement Benefit and can be reduced by amendment. | Lump sum under Excess Plan is alterable; Accrued Benefit is the annuity, not the lump sum. |
| Whether discovery into potential conflict of interest of benefits decision-makers was appropriate. | Discovery should be allowed to identify conflicts; minutes and deposing officials warranted. | Discovery should be limited; softening Semien but not open-ended; risk of harassment and burden. | Limited discovery appropriate only in exceptional circumstances; here, no basis to overturn committee’s decision. |
| What standard of review applies and whether the decision should be reviewed de novo or with deference to the plan’s committee. | Review should evaluate for potential conflict; favored de novo review without deference. | Review under de novo where plan interpretation disputed; in this case the committee's decision stood. | Reviewed de novo; decision of benefits committee affirmed. |
Key Cases Cited
- Call v. Ameritech Management Pension Plan, 475 F.3d 816 (7th Cir. 2007) (discussed accrued-benefit interpretation and lump-sum treatment)
- Semien v. Life Insurance Co. of North America, 436 F.3d 805 (7th Cir. 2006) (discovery standards in ERISA benefit-denial challenges)
- Metropolitan Life Insurance Co. v. Glenn, 554 U.S. 105 (U.S. 2008) (conflict-of-interest factor in review of plan determinations)
- Marrs v. Motorola, Inc., 577 F.3d 783 (7th Cir. 2009) (conflict of interest and discovery considerations in review)
- Kemmerer v. ICI Americas Inc., 70 F.3d 281 (3d Cir. 1995) (contractual anti-cutback concepts in plans)
- Gallo v. Amoco Corp., 102 F.3d 918 (7th Cir. 1996) (contract interpretation principles in ERISA plans)
- McDaniel v. Chevron Corp., 203 F.3d 1099 (9th Cir. 2000) (ERISA plan interpretation and benefits disputes)
- Allen v. Adage, Inc., 967 F.2d 695 (1st Cir. 1992) (statutory and contract-interpretation principles in benefits)
- Schultz v. Metropolitan Life Ins. Co., 872 F.2d 676 (5th Cir. 1989) (ERISA plan interpretation and lump-sum considerations)