963 F. Supp. 2d 310
S.D.N.Y.2013Background
- Plaintiffs allege ERISA violations relating to RBAP’s five-year service-based normal retirement age.
- SAC asserts invalid RBAP NRA, defective SPD, and fiduciary misrepresentation claims; Laurent I previously survived a motion to dismiss.
- Court analyzes Rule 12(b)(6) plausibility and law-of-the-case questions, with emphasis on Duchow and ERISA 3(24) and 203.
- Court rejects Duchow-only reasoning and adopts a plain-text interpretation of ERISA § 3(24) to invalidate RBAP NRA.
- IRS Notice 2007-69 and its interpretation of accrual rules are considered for backloading/vesting analysis; notice is given deference.
- Court denies PWC’s motion to dismiss Count One, Count Five (backloading/accrual), and Count Six (SPD fiduciary duties).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of RBAP NRA as ERISA definition | RBAP NRA based on five years of service violates §203(a) and §1053. | ERISA §3(24) allows plan-based NRA; no impermissible vesting or age-based restriction. | RBAP NRA invalid; defined via service, not age, violates ERISA. |
| Application of 2007 IRS Notice to accrual/backloading | Notice supports Plaintiffs’ view that RBAP violates §411 accrual; retroactive effect not required. | Notice is prospective and non-binding retroactivity; deference not warranted. | Notice applies and supports accrual/vesting violation; substantial deference given; guides plausibility. |
| Backloading/Change-the-base analysis under §411(b)(2)(ii)(F) | RBAP NRA changes base via service-based trigger, causing backloading violation. | No prohibited change in base; data depend on facts; no automatic backloading. | RBAP NRA violates §411(b)(2)(ii)(F); change-the-base interpretation supports violation. |
| SPDs' accuracy regarding normal retirement age and harm standard post-CIGNA | SPD failed to define NRA, causing harm and misrepresentation; equitable relief warranted. | No injury shown and relief not permitted; prior law controls. | SPD defect violated §102(a); equitable relief (surcharge/reformation) viable; harm shown under CIGNA standard. |
| FIDUCIARY DUTIES: misrepresentation in SPDs and class communications | Misleading SPDs breached ERISA §404(a) standards; harm shown under CIGNA. | Claims either lack harm or are time-barred; prior law governs. | Claims survive; harm shown; no dispositive statute-bar issue; equitable relief plausibly available. |
Key Cases Cited
- Duchow v. New York State Teamsters Conference Pension and Retirement Fund, 691 F.2d 74 (2d Cir. 1982) (two vesting paths: age-based and service-based under ERISA §203(a)/(a)(2))
- Fry v. Exelon Corp. Cash Balance Pension Plan, 571 F.3d 644 (7th Cir. 2009) (ERISA defines normal retirement age; age+years interpretations permissive)
- Esden v. Bank of Boston, 229 F.3d 154 (2d Cir. 2000) (agency deference to IRS interpretations of ERISA regulations)
- Cigna Corp. v. Amara, 131 S. Ct. 1866 (2011) (equitable relief standards under ERISA; harm considerations for relief)
- Frommert v. Conkright, 433 F.3d 254 (2d Cir. 2006) (SPD accuracy controls and reliance considerations under ERISA)
- Langman v. Laub, 328 F.3d 68 (2d Cir. 2003) (backloading and accrual rule interpretation under ERISA)
- Carollo v. Cement & Concrete Workers Pension Plan, 964 F. Supp. 677 (E.D.N.Y. 1997) (change-the-base concept under §411(b)(2)(ii)(F))