Stamper v. Boilermaker-Blacksmith National Pension Trust

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF OKLAHOMA

PAMELA S. STAMPER, )

)

Plaintiff, )

)

v. ) Case No. 19-CV-329-TCK-JFJ

)

BOILERMAKER-BLACKSMITH )

NATIONAL PENSION TRUST, )

)

Defendant. )

OPINION AND ORDER

Before the Court is plaintiff Pamela S. Stamper’s (Stamper or Plaintiff) appeal of the denial

of her benefits claim by the Boilermaker-Blacksmith National Pension Trust (Trust). The appeal

is brought pursuant to Section 502(a)(1)(B) of the Employee Retirement Income Security Act

(ERISA), 29 U.S.C. § 1132(a)(1)(B). This Court has subject matter jurisdiction pursuant to ERISA,

§ 502(e) and (f), 29 U.S.C. § 1132(e) and (f), and 28 U.S.C. § 1331.

Plaintiff is the surviving spouse and widow of Charles R. Brown (Brown), who died in

December, 2017, at the age of 65. During his lifetime, Brown worked in the boilermaker trade and

was a member of the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths,

Forgers and Helpers, AFL-CIO (Union). Through his Union membership, Brown was a participant

of the Boilermaker-Blacksmith National Pension Plan (Plan), which is managed and administered

by the Trust. After being diagnosed with cancer in late 2006, Brown applied for an Early

Retirement Pension and was awarded an Annuity Starting Date (ASD) of October 1, 2007 for his

pension benefits. When Brown was approved for Social Security Disability Insurance (SSDI)

benefits by the Social Security Administration (SSA), he notified the Trust to convert his Early

Retirement Pension to Disability Pension. In so doing, Brown requested that the Trust change his

form of benefit from a 50% Husband-and-Wife survivor annuity to a life annuity with 120-month

guaranteed payment lifetime annuity. In August, 2009, the Trust finalized the conversion and

changed Brown’s benefit pursuant to his request, but the Trust maintained Brown’s ASD of

October 1, 2007.

Upon Brown’s death in December 2017 and after having received 123 monthly pension

payments, the Trust notified Stamper that she was not entitled to survivor benefits because of the

pension conversion. Stamper challenges the Trust’s denial of surviving spouse benefits and

requests judicial review under 29 U.S.C. § 1132(a)(1)(B), arguing that the Trust erroneously

applied the October 1, 2007 ASD to Brown’s converted Disability Pension. The Trust responds

that the Plan in effect at the time of the conversion1 provided for a retroactive ASD, and

consequently, Brown’s ASD remained unchanged even though his form of benefit changed. Thus,

broadly speaking, the issue before the Court is whether the Trust reasonably construed the Plan’s

terms in applying the October 1, 2007 ASD to Brown’s Disability Pension.

I. FACTUAL BACKGROUND

A. Brown’s Early Retirement Pension

Brown was diagnosed with cancer, and in 2006, due to the effects of his radiation

treatments, Brown was no longer able to work. Docs. 26-6 at 145 and 26-7 at 92.2 The record

reflects that, as early as May 2007, Brown contacted the Trust to inquire about his pension benefit

options for disability. Doc. 26-7 at 113. In response, the Trust informed Brown that a Disability

1. The Plan in effect at the time of Brown’s application and all relevant dates in this case is the

Eleventh Restatement of the Rules and Regulations of the Pension Plan, including Amendments

1-8. Doc. 26-4 at 1-107. Unless otherwise indicated, use of the word “Plan” herein is in reference

to the Eleventh Restatement, including Amendments 1-8.

2. This Opinion and Order references exhibits by their page number in the CM/ECF record.

Pension application cannot be processed until he receives a certificate of award from the SSA, but

that his “Early Retirement Pension could be changed . . . to Disability, if [his] date of entitlement

to disability benefits [was] prior to, or within 12 months following, the effective date of [his] Early

Retirement Pension.” Id. at 109. In light of this, the Trust provided Brown with Early Retirement

Pension estimates, payable as either a husband-and-wife joint survivor annuity or a 60-month

single life annuity. Id. at 110-12. The Trust’s letter explained that a husband-and-wife survivor

annuity provides the surviving spouse of a predeceased participant with a monthly pension

payment (albeit at a reduced amount) for the remainder of the spouse’s life. Id. By contrast, the

Trust explained that a certain payment single life annuity guarantees payment for a certain period

of 60 months or for the life of the participant, whichever is longer; in the event a participant

predeceases the guaranteed number of monthly payments, the remaining payments would pass to

the participant’s named beneficiary. Id. In closing, the Trust instructed Brown to request a pension

application “[a]bout two months before you wish to retire.” Id. at 111.

Brown contacted the Trust on July 19, 2007 to request a pension application. Id. at 108. In

a series of letters dated July 24, 2007, the Trust provided Brown with the necessary pension

application materials; estimates of the various pension options available to Brown and the relative

value explanation for each option; and detailed instructions regarding the application process and

the dates by which application materials and benefit elections must be submitted. Id. at 103-07.

Brown submitted his complete application for pension benefits on September 14, 2007—

the earliest date that he qualified for the Plan’s Early Retirement Pension.3 Doc. 26-6 at 161-69.

3. According to the Plan, an otherwise eligible participant must be at least 55 to qualify for the

Early Retirement Pension. Doc. 26-4 at 18. Having previously satisfied all other conditions for

eligibility, Brown submitted his Early Retirement Pension application on his fifty-fifth birthday.

Doc. 26-6 at 161.

Under the Plan rules, eligible participants who submit a complete application for benefits on or

before the fourteenth day of the month are entitled to an ASD on the first day of the following

month. Doc. 26-4 at 86. On January 9, 2008, the Trust notified Brown that his Early Retirement

Pension application was approved, and in accordance with the Plan rules, Brown’s ASD was

determined to be October 1, 2007. Doc. 26-7 at 80-81.

The record contains the documents submitted by Brown as part of his September 14, 2007

Early Retirement Pension application. Of particular relevance, Brown’s Early Retirement

application form indicated that he had applied for SSDI and that his case was still under review by

the SSA at the time of his application. Doc. 26-6 at 161. His Early Retirement Pension application

also included a number of documents regarding his pension benefit elections. Notably, on a

document titled, “How My Pension Is To Be Paid,” Brown elected to receive his pension in the

form of a 50% Husband-and-Wife Pension. Id. at 167. That document and a separate spousal

consent and waiver document4 were signed and dated before a Notary Public by Brown and

Stamper on September 14, 2007. Id. at 164, 167. Brown also requested to be advised of the

additional amount he could receive with the Social Security Level Income option (Level Income)

offered by the Plan.5 Id. at 169.

4. This document waives the mandatory 30-day waiting period between benefit election and the

ASD, and the document also provides Stamper’s consent to Brown’s changing the form of benefit

or designation of beneficiary. Doc. 26-7 at 80-81.

5. The Level Income option was offered to the Plan’s Early Retirement pensioners, and it provided

an increased monthly benefit until the pensioner reached the Social Security Normal Retirement

Age and correspondingly reduced thereafter. Doc. 26-4 at 26-27. According to the record, after

receiving notice that the exact amount he would receive from the Level Income option would be

additional $949.76 per month, Brown elected to receive the Level Income additional benefit, which

is indicated on a form signed by Brown and Stamper on November 27, 2007. Doc. 26-7 at 83-85.

The Level Income option was not available for Disability Pensions, id. at 27; however, under §

3.19(f) of the Plan, otherwise eligible Early Retirement pensioners who wish to convert to a

Disability Pension may do so, provided that the additional amount they received from the Level

Income be repaid by offset of the Disability Pension after the conversion. Id. at 28.

Upon its approval of Brown’s Early Retirement Pension application, the Trust issued a

check for the monthly payments owed to Brown from his ASD through January 9, 2008—the date

of approval for Brown’s pension. Id.

B. Conversion of Brown’s Early Retirement Pension to Disability Pension

On January 21, 2008, Brown sent the Trust a letter advising that he had recently been

awarded Social Security disability benefits and wished to convert his Early Retirement Pension to

a Disability Pension. Id. at 71-77. He attached a copy of the Notice of Award from the SSA, which

stated that he was entitled to SSDI benefits beginning December 2006 and that he would receive

regular monthly SSDI payments “effective January 2008.” Id. at 77.

In a letter dated March 28, 2008, the Trust acknowledged Brown’s request to convert his

Early Retirement Pension to a Disability Pension, informed him that the Level Income option he

was receiving is not allowable with a Disability Pension, and enclosed a letter with estimates of

the various benefit elections available under Brown’s Disability Pension and the relative value

explanation for each election. Id. at 66-70. Pursuant to § 4.07(f) of the Plan, “[i]n the event a

Pensioner is granted a Social Security Disability Award . . . effective during the 12-month

period immediately following the commencement of his Early Retirement Pension . . . he will

be allowed to change his previous election or rejection of the Husband-and-Wife Pension.” Doc.

26-4 at 33 (emphasis added). Accordingly, the letter explained the benefits available to Brown,

which included the various Husband-and-Wife survivorship annuities, the 60-month single life

annuity, and the 120 Certain Payment annuity option.6 Of relevance, the letter stated that Brown

6. The “How My Benefits Is To Be Paid Form” refers to this as the “120-Month Option.” See e.g.

Doc. 26-7 at 64. However, the Plan refers to this benefit as the “120 Certain Payment” option.

Doc. 26-4 at 23. The Trust also makes references to this as the “120 Month Certain Option” form

would receive $3,085.54 per month if he elected the 50% Husband-and-Wife survivor annuity, or

alternatively, $3,508.80 per month if Brown elected the 120 Certain Payment annuity option. Id.

at 68. The letter also included a new “How My Pension Is To Be Paid” election form for Brown

to complete. Doc. 26-7 at 67-69.

The Trust wrote to Brown on May 22, 2008, stating that it had not received a response to

its March 28, 2008, letter. Id. at 65. To that end, the Trust instructed Brown to return the election

form if he wished to continue with the process of converting his Early Retirement Pension into a

Disability Pension. Id. In response, Brown sent the “How My Pension Is To Be Paid” election

form to the Trust, electing to receive his Disability Pension in the form of a 120 Certain Payment

life annuity. Id. at 64. The form was signed and dated by both Brown and Stamper on May 5, 2008,

and their signatures were executed before a Notary Public. Id. However, on July 10, 2008, the

Trust, again wrote to Brown, and while it acknowledged receiving Brown’s election form, the

Trust reminded Brown that he needed to repay the money he had received from the Level Income

option before his Disability Pension payments could commence. Id. at 61. Accordingly, the Trust

instructed Brown that he must provide a written request to have the Level Income payments he

had received to date deducted from his initial Disability Pension check, and upon the Trust’s

receipt of that request, payments on his Disability Pension would commence. Id.

The record does not contain any further correspondence between Brown and the Trust until

February 26, 2009, when the Trust wrote Brown to inform him that it had not received any response

to its July 10, 2008 letter. Id. at 55. The Trust, again, provided Brown with the various benefit

elections available to him under a Disability Pension and the relative value explanation for each

of benefit. Doc. 26-9 at 1. These terms are used interchangeably to refer to an annuity that is

payable for the lifetime of the participant but with a 120-payment guarantee.

election. Id. at 56-59. The Trust also sent Brown a new “How My Pension Is To Be Paid” form

for he and Stamper to complete. On June 10, 2009, Brown wrote to the Trust, stating,

I would like at this time to change my early retirement pension to a disability

pension. I understand that all the paperwork is in order except for my signed

approval of paying back the level income option funds and “How my benefits is to

be paid form”.

This statement is to verify that as [of] June 1, 2009, I have received a total amount

of $19,944.96 which is a total of 21 months of level income option. I understand

that you will need to deduct this amount (or an additional month if need be) from

my first disability pension check.

Also, my “How my benefits is to be paid form” is enclosed.

Please notify me when I could expect my first check which would include the

retroactive amounts of my disability pension minus the early retirement benefits

and minus the level income option amounts. My figure for the amount of my first

check is $44,982.36 as of June 1, 2009. The subsequent amount per month would

be $3,508.80.

Id. at 54. Brown included a newly executed and notarized “How My Pension Is To Be Paid” form,

signed by both Brown and Stamper on June 18, 2009. Id. at 46. Again, the form indicated that

Brown wished to receive the 120 Certain Payment annuity option, which provided for $3,508.80

per month, for the life of Brown but in no event less than 120 months. Id.

On August 5, 2009, the Trust informed Brown that his Early Retirement Pension had been

“recomputed as a Disability effective December 1, 2006.” Id. at 36. The Trust issued a check in

the amount of $45,816.46, which represented the difference between the amount of Brown’s 120

Certain Payments monthly benefit dating to December 1, 2006, and the amount Brown received

from his 50% Husband-and-Wife Early Retirement Pension payments beginning October 1, 2007,

less the Level Income Option income he had received. Id. While the $3,508.807 monthly benefit

7. Although the Trust’s August 5, 2009 letter informed Brown that his 120 Certain Payments

monthly benefit would be $3,476.74, the Trust incorrectly omitted Brown’s contributions between

December 1, 2006 and October 1, 2007, when it calculated his Disability Pension benefit. Id. at 1.

would be retroactive to December 1, 2006—Brown’s SSDI Date of Commencement—the Trust’s

pension recompute analyses consistently maintained October 1, 2007, as Brown’s Disability

Pension ASD. Id. at 37, 60, 62-63, 70.

C. Brown’s Death and Stamper’s Appeal of Trust’s Benefit Determination

Brown passed away on December 24, 2017—123 months after his October 1, 2007 ASD.

Doc. 26-9 at 18, 34. The Trust sent a letter to Stamper on January 11, 2018 to inform her that she

would not be entitled to additional monthly pension benefits, stating in relevant part, “Mr. Brown’s

pension was effective October 1, 2007, so the 120-Month Certain form of benefit was completed

September 1, 2017.” Id. at 23. Stamper contacted the Trust to inquire about its determination

regarding termination of benefits, stating that she believed the 120 payments began when Brown

converted his Early Retirement Pension to Disability in August 2009—not from Brown’s Early

Retirement ASD. Id. at 12, 22. In response to her inquiry, the Trust provided Stamper with a written

explanation of its determination, writing in pertinent part:

Your husband retired October 1, 2007 on an Early Retirement Pension under the

50% Husband and Wife Option. In August 2009, your husband’s pension benefit

was converted from an Early Retirement Pension payable under the 50% Husband

and Wife Option to a Disability Pension payable under the 120 Month Certain

Option. The 120 month guarantee started on your husband’s Annuity Starting Date

of October 1, 2007. It did not start from the time his pension was converted from

an Early Retirement Pension to a Disability Pension because upon conversion,

your husband received a lump sum Auxiliary Disability benefit equal to the

Disability benefit under the 120 Month Certain amount which was payable

under the Disability Pension dating back to December 2006. Therefore,

commencing the 120 month guarantee upon conversion in August 2009 would

effectively grant a guarantee period in excess of 120 months for the Disability

Pension monthly benefit amount.

In 2014, the Trust recalculated Brown’s benefit and found that his monthly benefit should have

been $3,508.80 under the 120 Certain Payments option. Id. Brown’s monthly pension payments

were adjusted accordingly, and the Trust issued Brown a check in the amount of the backpay, plus

interest, that he was owed due to the discrepancy. Id.

Id. at 1. The Trust enclosed the “How My Pension Is To Be Paid” form executed by Brown and

Stamper before a Notary Public on June 18, 2009, in which Brown elected to receive his Disability

Pension in the form of a 120-month certain payment annuity. Id. at 3.

In accordance with the Plan’s appeals procedure, Stamper initiated an appeal of the Trust’s

denial of further pension benefits. Doc. 26-6 at 66. Plaintiff’s appeal was presented to the Trust’s

Board of Trustees’ Pension Appeals Committee on June 12, 2018. Id. at 15-16. The Trustees

denied Stamper’s appeal, and in a written explanation of its denial, the Trust cited Eleventh

Restatement of the Pension Plan § 4.07(f), which provides for revocation of a Husband-and-Wife

form of benefit upon conversion to a Disability Pension, and 7.05(g), which governs the effective

date of a converted Disability Pension.8 Doc. 26-6 at 1-2. In other words, the Trust took the position

that Brown’s Disability Pension ASD was retroactive to his Early Retirement Pension ASD, with

Brown being entitled to an Auxiliary Disability Benefit from his SSDI date of entitlement in

December 2006 until his ASD in October 2007.

Stamper now requests judicial review of the Trust’s denial of benefits, filing her Complaint

on June 21, 2019. Doc. 2. Stamper’s Complaint seeks one claim for relief under 29 U.S.C. §

1132(A)(1)(B) to enforce the terms of the Plan and recover the benefits to which she is allegedly

entitled.

8. In relevant part, § 7.05(g) of the Plan states that an Early Retirement pensioner who receives an

SSDI award “with a date of entitlement prior to the commencement of his Early Retirement

Pension . . . will be allowed . . . to receive a Disability Pension.” Doc. 26-4 at 53. It further provides

that “[t]he effective date of the Disability Pension will be determined in accordance with

Section 3.11” of the Plan. Id. (emphasis added). Importantly, § 3.11 of the Plan states that a

Disability Pension “shall commence on the Participant’s Annuity Starting Date,” and if the

SSDI date of entitlement predates the ASD, the participant will be entitled to an “Auxiliary

Disability Benefit,” which is “equal to the monthly benefit . . . between the entitlement date of the

[SSDI] and the Annuity Starting Date of the Disability Pension.” Id. at 20 (emphasis added).

II. Standard of Review

A plan beneficiary, like the Plaintiff in this case, may file a civil action under 29 U.S.C. §

1132(a)(1)(B), seeking recovery of plan benefits or the enforcement of the plan’s terms. A

beneficiary seeking enforcement under § 1132(a)(1)(B) carries the burden of establishing that she

is entitled to benefits under the terms of the plan. Hodges v. Life Ins. Co. of N. Am., 920 F.3d 669,

680 (10th Cir. 2019) (citing Rasenack ex rel. Tribolet v. AIG Life Ins. Co., 585 F.3d 1311, 1324

(10th Cir. 2009). Thus, in order for Plaintiff to prevail on her § 1132(a)(1)(B) claim, she must

establish that the terms of the Plan administered by the Trust entitle her to the benefits she seeks.

Generally, a plan administrator’s benefit determination is reviewed de novo; however,

where—as here—the terms of the plan confer discretionary authority upon its administrator to

determine eligibility for benefits or to construe the terms of the plan, the administrator’s decision

is reviewed under an arbitrary and capricious standard. Firestone Tire & Rubber Co. v. Bruch, 489

U.S. 101, 115 (1989). Under this standard, the court’s review is confined only to the administrative

record and must consider whether the rationale asserted by the plan administrator in its decision

was in accordance with the documents and instruments governing the plan.” Flinders v. Workforce

Stabilization Plan of Phillips Petroleum Co., 491 F.3d 1180, 1193 (10th Cir. 2007) abrogated on

other grounds by Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 128 (2008). The administrator’s

decision will be upheld “so long as it was made on a reasoned basis and supported by substantial

evidence.” Van Steen v. Life Ins. Co. of N. Am., 878 F.3d 994, 997 (10th Cir. 2018). “Substantial

evidence is such evidence that a reasonable mind might accept as adequate to support the

conclusion reached by the decision maker,” requiring “more than a scintilla but less than a

preponderance.” Rekstad v. U.S. Bancorp, 451 F.3d 1114, 1119-20 (10th Cir. 2006) (citations

omitted). “The Administrator[‘s] decision need not be the only logical one nor even the best one,”

Woolsey v. Marion Lab’ys, Inc., 934 F.2d 1452, 1460 (10th Cir. 1991); rather, the decision need

only “fall somewhere on a continuum of reasonableness—even if on the low end.” Kimber v.

Thiokol Corp., 196 F.3d 1092, 1098 (quoting Vega v. National Life Ins. Serv., Inc., 188 F.3d 287,

297 (5th Cir.1999)).

Conversely, “[i]ndicia of arbitrary and capricious decisions include lack of substantial

evidence, mistake of law, bad faith, and conflict of interest by a fiduciary.” Mantooth v. AT & T

Umbrella Benefit Plan No. 1, 804 F. Supp. 2d 1171, 1178 (N.D. Okla. 2011) (quoting Caldwell v.

Life Ins. Co. of N. Am., 287 F.3d 1276, 1282 (10th Cir. 2002)). A conflict of interest arises in cases

where an ERISA fiduciary plays a dual role in both determining eligibility and paying claims from

its own pocket. Mantooth, 804 F. Supp. 2d at 1178 (citing Metropolitan Life Ins. Co. v. Glenn, 554

U.S. 105 (2008). When such a conflict arises, the Supreme Court has instructed courts to review

an administrator’s decision by “taking account of several different, often case-specific, factors,

reaching a result by weighing all together.” Glenn, 554 U.S. at 117. The Tenth Circuit has

interpreted this to mean reviewing courts should employ “a combination-of-factors method of

review” in which importance attached to any conflict of interest is “proportionate to the likelihood

that the conflict affected the benefits decision.” Graham v. Hartford Life & Acc. Ins. Co., 589 F.3d

1345, 1358 (10th Cir. 2009) (quoting Holcomb v. Unum Life Ins. Co. of Am., 578 F.3d 1187, 1193

(10th Cir.2009). The Tenth Circuit is clear, however, that the existence of a conflict of interest

does not alter a court’s arbitrary and capricious standard of review—the conflict is merely a factor

affecting only “the outcome at the margin, when [the court] waver[s] between affirmance and

reversal.” Hancock v. Metro. Life Ins. Co., 590 F.3d 1141, 1155 (10th Cir. 2009).

Here, the parties do not dispute that the arbitrary and capricious standard applies to the

Court’s review. (Docs. 30 at 9-12; 31 at 2-3). However, for the first time in her Reply, Plaintiff

raises the existence of a conflict of interest, simply asserting—without reference to evidence in the

administrative record—that the Trust’s “dual role of both plan insurer and administrator” creates

a conflict of interest, citing Van Steen, 878 F.3d at 997. (Doc. 31 at 3). The Court is not persuaded

that Plaintiff has successfully established a meaningful conflict of interest in this case. First, unlike

Van Steen, 878 F.3d at 997, where the plan administrator was also the plan insurer, the Plan in this

case is a multi-employer contribution pension fund, which is administered, but not insured by, the

Trust, Doc. 26-1 at 9-13. Second, even if an inherent conflict of interest does exist with the Trust’s

administration of the Plan, Plaintiff has not identified how or in what way that conflict of interest

affected its decision in this particular case. Graham, 589 F.3d at 1358. Thus, to the extent there is

an inherent conflict of interest, the Court will not substantially reduce the deference given to the

Trust’s decision. Mantooth, 804 F. Supp. 2d at 1179 (“[P]laintiff has not cited any evidence

showing that the conflict of interest was particularly important in this case and the Court will not

substantially reduce the level of deference to the Plan administrator’s decision.”).

III. DISCUSSION

Stamper argues that, given the timing of Brown’s SSDI award and his election of the 120-

month payment option, there are only two possible outcomes under the relevant Plan rules and

federal law: either (1) the 120-month option applies to Brown’s retirement pension, but with an

ASD later than October 1, 2007; or (2) Brown’s election of the 120-month option is void and his

Disability Pension reverts to the Plan’s default form of benefit for married participants, namely,

the 50% Husband-and-Wife survivor annuity. Doc. 29 at 12. The Court disagrees for the reasons

discussed below.

A. Under the Terms of the Plan, the Trust Reasonably Concluded Brown’s ASD Was

October 1, 2007

As a preliminary matter, the Court notes that the ASD for Brown’s Early Retirement was

correctly established under the Plan Rules as October 1, 2007. Specifically, § 1.22 of the Plan

Rules defines an ASD in pertinent part:

Section 1.22 Annuity Starting Date

(a) Generally. The Annuity Starting Date shall be the first day of the first calendar

month starting after the applicant has fulfilled all of the conditions for

entitlement to benefits, including the submission of a completed application for

benefits, unless it is deferred by the applicant’s election. Notwithstanding the

foregoing,

(1) the establishment of an Annuity Starting Date under this Plan shall also be

subject to the other requirements set forth in this Section 1.22, and to the

spousal consent requirements set forth in Sections 4.03 and 4.09 of the Plan;

. . .

. . . .

(b) Explanation of Benefits. The Annuity Starting Date shall not be less than 30

days after the Plan provides the Participant a written explanation of the

available forms of payment, unless at least one of the exceptions set forth in

subsubsection (c) is met. . . . If at least one of the exceptions set forth in

subsection (c) is met, then the Annuity Starting Date may be established under

subsection (a) without having satisfied the otherwise applicable 30-day notice

requirement. In no event, even if the 30-day notice requirement is waived, may

an Annuity Starting Date be established that is prior to the date on which the

Plan provides the Participant a written explanation of the available forms of

payment. Such written explanation shall be provided without regard to what

form of payment the Participant and spouse, if any, ultimately elect, and shall

not predate the Annuity Starting Date by more than [180] days.9

Doc. 24-4 at 86. The record reflects that, on July 24, 2007, the Trust sent Brown the application

for pension benefits, which included a detailed explanation of the benefit forms available to him.

Within 90 days of receiving the application and explanation of benefit elections, Brown submitted

9. As of January 1, 2007, the 90-day requirement was amended to 180 days. Doc. 26-4 at 103. The

Court substituted the amended language for clarity and ease of reading.

his complete Early Retirement Pension application on September 14, 2007. As of the date on which

Brown submitted his application, he had fulfilled all conditions for Early Retirement Pension

benefit. While Brown’s pension application was submitted less than 30 days before October 1,

2007, Brown and Stamper waived the mandatory 30-day waiting period before commencement of

pension benefits, in accordance with subsection (c) of § 1.22.10 Accordingly, the Trust correctly

established Brown’s ASD as October 1, 2007, for his Early Retirement Pension.

1. Converting to Disability Pension Did Not Alter Brown’s ASD

Under §7.05(g) of the Plan Rules, when an Early Retirement pensioner is granted an SSDI

award “with a date of entitlement prior to the commencement of his Early Retirement Pension . . .

or during the immediately following 12-month period,” he will be allowed to change it upon a

“written request for conversion,” Doc. 26-4 at 53-54 (emphasis added). The “effective date” for a

converted Disability Pension is on the participant’s ASD. Id. at 20 (Plan Rule § 3.11(a)). In the

event a participant’s ASD is after his SSDI “Entitlement Date”—i.e., the date on which he became

entitled to SSDI benefits—then Plan Rule § 3.11(b) provides that the participant is entitled to an

“Auxiliary Disability Benefit,” which is a lump sum Disability Pension payment that covers the

period of time between the SSDI Entitlement Date and the pensioner’s ASD. Id.

Here, the Trust construed the term “conversion” in §7.05(g) to mean a change “from one

form to another.” Doc. 30 at 20 (quoting Black’s Law Dictionary, “conversion” (11th ed. 2019)).

Specifically, an Early Retirement pensioner who converts to a Disability Pension changes the form

10. Section 1.22(c)(3) of the Plan provides that a participant may consent in writing to the

establishment of an ASD before the mandatory 30-day waiting period before commencement of

benefits, provided that they acknowledge their right to take up to 30 days to consider the election

options, the participant is given seven days to change or cancel his election, and distribution of

benefits is at least seven days after the ASD. Doc. 26-4 at 87. Brown and Stamper acknowledged

their right to take up to 30 days to consider their elections before the ASD, Doc. 26-6 at 164, and

the benefits did not commence until January 2008, 26-7 at 80-81.

of pension, and therefore, the calculation of pension benefits; the Plan, however, is silent as to

whether the ASD for a converted pension must reflect the date of conversion or whether it remains

the same as the previously established Early Retirement ASD. The Trust reasonably construed the

“effective date” of the converted Disability Pension to be the pensioner’s previously established

ASD with an Auxiliary Disability Benefit to cover the period between the pensioner’s SSDI

Entitlement Date and his previously established ASD. Id. at 18-20. This interpretation is facilitated

by Plan Rule § 4.07(f), which, as discussed below, provides for a retroactive ASD.11 Id. at 16-17.

Thus, when Brown converted his Early Retirement Pension to Disability, the Trust changed only

the form of pension, not his ASD. Id. Further, the Trust paid Brown an Auxiliary Benefit, which

was an amount equal to his monthly Disability Pension from Brown’s SSDI date of entitlement to

ASD.

Stamper argues that Brown’s ASD for his converted Disability Pension under § 3.11(a) is

determined according to § 1.22 for his Disability Pension—i.e., an entirely new ASD—and, thus,

the money Brown received from the Trust in August 2009 was necessarily an Auxiliary Disability

Benefit. Doc. 29 at 17. Specifically, Stamper argues: (1) Brown must be eligible for disability

before his disability ASD; (2) Brown’s SSDI award came in January 2008—after the October 1,

2007 ASD; (3) Plan § 3.11(a) states that a Disability Pension begins on the participant’s ASD; (4)

the Auxiliary Disability Benefit under Plan § 3.11(b) differentiates between the ASD and

“disability entitlement date; and (5) the Trust sent Brown a lump sum disability benefit payment

in August 2009. Id. at 16-17. Therefore, she concludes, “the ASD according to the plain language

of the Plan Rules cannot be earlier than September 2009.” Id. at 17.

11. A retroactive ASD is an annuity starting date affirmatively elected by a participant that predates

a participant’s waiver of the Husband-and-Wife Pension. Doc. 30 at 17-18; see also 26 U.S.C. §

417(a)(7); 26 C.F.R. § 1.417(e)-1 (b)(3)(iv).

Even if the Court were to accept the premises of her argument in isolation, the conclusion

she draws from them does not follow. To the contrary, her argument relies on the unstated premise

that a converted Disability Pension must have an ASD independent of the Early Retirement

Pension. That assumption finds no support in the plain language of the Plan. At most, Stamper has

identified an ambiguity in the terms of the Plan—i.e., whether § 1.22 applies to converted pensions.

To the extent that the Plan’s treatment of the ASD for converted pensions is ambiguous, the Trust

construed §§ 7.05(g) and 4.07(f) to displace the general rules regarding the establishment of a

converted Disability Pension ASD. See Young v. Verizon’s Bell Atl. Cash Balance Plan, 615 F.3d

808, 823 (7th Cir. 2010) (When analyzing ERISA plan, “if both a general and a specific provision

apply to the subject at hand, the specific provision controls.”). To that end, the Trust determined

that the ASD for converted Disability Pensions are retroactive to the Early Retirement ASD.

Stamper’s interpretation of the Plan as it relates to the ASD for converted Disability Pensions is

simply different from the Trust’s interpretation. See Kimber, 196 F.3d at 1100 (“When a plan

administrator is given authority to interpret the plan language, and more than one interpretation is

rational, the administrator can choose any rational alternative.”). The Court does not find that the

Trust’s interpretation was unreasonable or made in bad faith and, thus, declines to set it aside.

Trujillo v. Cyprus Amax Mins. Co. Ret. Plan Comm., 203 F.3d 733, 736 (10th Cir. 2000) (Court

“will not set aside a benefit committee’s decision if it was based on a reasonable interpretation of

the plan’s terms and was made in good faith”).

2. Section 4.07(f) Permitted Brown to Change Form of Benefit After His ASD

Generally, Plan participants who receive their pension benefit in the form of a Husband-

and-Wife Pension may not alter or revoke their election after payment of the pension has

commenced. Doc. 26-4 at 33. However, § 4.07(f) of the Plan provides an exception when a

pensioner “is granted a Social Security Disability Award . . . effective during the 12-month period

immediately following the commencement of his Early Retirement Pension.” Id. In such a case,

where the pensioner converts to a Disability Pension, the pensioner “will be allowed to change his

previous election or rejection of the Husband-and-Wife Pension . . . provided the change is elected

at the time the . . . Pension is changed. Id.

The Trust reasonably construed § 4.07(f) to be applicable because Brown’s Disability

Pension was granted an SSDI award effective during the 12-month period immediately following

the commencement of his Early Retirement Pension. Specifically, the Trust construed the term

“effective” to mean “in operation at a given time.” Doc. 30 at 13 (quoting Black’s Law Dictionary

“effective” (11th ed. 2019)). Moreover, the Trust interpreted § 4.07(f) to be a rule of specific

applicability for pensioners converting to a Disability Pension that displaced the general rule under

§§ 1.22 and 4.03(b). Id. at 14-15.

Stamper challenges the Trust’s interpretation, arguing that § 4.07(f) applies only when a

pensioner’s SSDI date of entitlement is after his ASD. Doc. 29 at 25-27. She premises her

argument on the fact that the phrase “effective during” in § 4.07(f) “plainly emotes [sic] a

beginning date[,] not an operational period.” Doc. 31 at 5. Because the effective date of Brown’s

SSDI award was December 1, 2006, and because his Early Retirement Pension ASD is October 1,

2007, Stamper asserts that is inapplicable to Brown’s converted Disability Pension. Doc. 29 at 26-

27. That fact, Stamper contends, precluded Brown from changing or revoking his 50% Husband-

and-Wife Pension after his ASD. Id.

Yet, Stamper’s argument here has the same infirmity as her argument regarding § 7.05(g),

namely, that her interpretation of an (at most) ambiguous term in the Plan is simply different than

the Trust’s interpretation. The Court finds that the Trust’s interpretation of the word “effective” as

an operational period—i.e., “effective during”—is not untethered from an ordinary understanding

of the word as used in a phrase. Kimber, 196 F.3d at 1100. Thus, Stamper has not established—

and the Court declines to find—that the Trust’s interpretation of Plan Rule § 4.07(f) is

unreasonable or made in bad faith. Trujillo, 203 F.3d at 736.

3. The Trust’s Determination Is Not Inconsistent With Prior Interpretations of Plan

The reasonableness of a plan administrator’s determination will also be reviewed for its

consistency with prior interpretations of the plan by the administrator. Geddes v. United Staffing

All. Emp. Med. Plan, 469 F.3d 919, 929 (10th Cir. 2006). Stamper argues that the Trust’s

interpretation of §§ 7.05(g) and 4.07(f), in providing for a retroactive ASD for converted Disability

Pensions, is inconsistent with the Trust’s prior interpretation of the Plan. Doc. 29 at 27-28. Stamper

cites to a 2014 memo in which the Trust’s attorney advised the Trust that “the [Plan] has not been

amended to permit retroactive annuity starting dates. Plan Section 1.01 defines the [ASD] as the

first day of the calendar month starting after all of the conditions for entitlement to benefits,

including the submission of a completed application for benefits.” Id. at 27.

The Court notes at the outset that the 2014 memo was a “legal opinion” drafted by the

Trust’s attorney, not an interpretation of the Plan by the Trustees. Doc. 26-7 at 20. As the Trust

observes in its Response, Stamper fails to identify anything in the record that shows the Trustees,

rather than its counsel, concluded that the Plan did not have a retroactive ASD at the time Brown

converted to a Disability Pension. Doc. 30 at 17; Geddes, 469 F.3d at 929 (Court’s review asks

whether the plan administrator’s interpretation of ambiguous plan language “is consistent with any

prior interpretations by the plan administrator”) (emphasis added)).

Moreover, the 2014 memo cited by Stamper was not interpreting the Plan in effect at the

time Brown converted to a Disability Pension; rather it was a legal opinion interpreting the Twelfth

Restatement of the Plan. Given that the Trustees denied Stamper’s claim after being advised that

“the Participant’s conversion from Early Retirement to Disability was handled in a manner

consistent with Plan procedures then in effect,” the 2014 memo offered by Stamper does not

establish an inconsistent prior interpretation of the relevant Plan.12

Finally, the record is replete with documentation from the Trust at the time Brown

converted to a Disability Pension. In particular, a letter from the Trust to Brown on December 3,

2014, explicitly references Brown’s Disability Pension ASD as October 1, 2007. Doc. 26-7 at 1.

Additionally, the Trust’s pension recompute analyses consistently referenced Brown’s “Annuity

Date” of October 1, 2007, and his “Auxiliary Date” of December 1, 2006. Id. at 28, 37, 60, 63, 70.

Thus, the Court is not persuaded that the Trust’s denial of Stamper’s benefits was an “after-the-

fact construction” of the Plan. Doc. 31 at 5.

B. The Trust’s Denial of Benefits Was Not Contrary to Law

Stamper argues that the Trust’s denial of benefits is contrary to the Code and Treasury

Regulations because (1) the Plan in effect at the time of Brown’s pension conversion did not

provide for a retroactive ASD, and (2) Brown’s explanation of benefits did not sufficiently advise

12. The Trust attached the Twelfth Restatement of the Plan as an exhibit to its Response Brief,

Doc. 30-1, but the exhibit was not part of the administrative record. Generally, the Court’s review

is limited to the administrative record; however, where the evidence does not relate to benefit

eligibility, the Court may supplement the record. Murphy v. Deloitte & Touche Group Ins. Plan,

619 F.3d 1151, 1157–59 (10th Cir.2010). While the exhibit merely provides context to the 2014

memo that Stamper references, the Court need not consider it in order to address Stamper’s

argument. However, the Court nevertheless notes that the retroactive ASD provision, § 4.07(f), is

omitted from the Twelfth Restatement of the Plan. Compare Doc. 26-4 at 32-33 (Section 4.07 of

the Eleventh Restatement outlines the circumstances under which a Husband-and-Wife Pension is

not effective, which includes conversion to a Disability Pension under subsection (f)), with Doc.

30-1 at 44 (Section 6.08 of the Twelfth Restatement outlines the conditions under which a

Husband-and-Wife Pension is not effective, but it includes only subsections (a)-(e)).

her of the retroactive effect of her waiver of the Husband-and-Wife Pension. Doc. 29 at 23-25. The

Court addresses each argument in turn.

1. The Plan at the Time of Brown’s Pension Conversion Provided for a Retroactive ASD

Under 26 U.S.C. § 417, waiver of a qualified joint and survivor annuity (i.e., Husband-and-

Wife Pension) must occur within 180 days before the ASD, unless the plan provides for a

retroactive ASD. See 26 U.S.C. § 417(a)(6)-(7). Stamper argues that the Trust cannot base Brown’s

election of the 120 Certain Payment option on his October 1, 2007 ASD because that election

constituted a waiver of the Husband-and-Wife Pension, which occurred outside of the mandatory

180-day election period. Doc. 29 at 23-24. She asserts that the Plan did not provide for a retroactive

ASD at the time Brown converted to a Disability Pension, as evidenced by the 2014 memo from

the Trust’s counsel regarding the Twelfth Restatement of the Plan. Id. at 23-24. Thus, she

concludes, the Trust’s determination that Brown both waived the Husband-and-Wife Pension and

maintained his October 1, 2007 ASD is contrary to 26 U.S.C. § 417(a). Id.

However, as discussed above, Stamper’s reliance on this memo is misguided. Although

Stamper argues that the absence of the words “retroactive annuity starting date” from § 4.07(f) and

the entire Eleventh Restatement of the Plan implies that the Plan did not provide for a retroactive

ASD, she cites no authority that requires an ERISA plan to use those words or sequence of words

in order to comply with 26 U.S.C. § 417(a)(7) and C.F.R. § 1.417(e)-1 (b)(3)(iv). Doc. 31 at 8.

Stamper fails to identify anything in the record affirmatively demonstrating that the Trustees

interpreted the Eleventh Restatement of the Plan to not allow a retroactive ASD.13 The Trust

13. To some extent, Stamper attempts to show that the Plan does not provide for a retroactive ASD

by relying on the language of Plan Rule § 1.22. Doc. 29 at 23-24. As discussed, the Trust has

interpreted § 1.22 to be a general Plan Rule, which is displaced by the more specific Plan Rule, §

4.07(f), and thus, § 1.22 is not germane to the ASD for converted Disability Pensions.

contends that § 4.07(f) provides for a retroactive ASD in the Eleventh Restatement of the Plan.

Doc. 30 at 16-17. Given that § 4.07(f) of the Plan does allow a participant to waive the Husband-

and-Wife survivor annuity after commencement of benefit payments, as would be required in order

for a retroactive ASD in an ERISA plan, the Court finds the Trust’s argument persuasive.

2. The Trust Sufficiently Explained Waiver of the Husband-and-Wife Pension

Under 26 U.S.C. § 417(a)(2), a spouse’s consent to waiver of the Husband-and-Wife

survivor annuity must acknowledge the effect of such election. In order to effectuate this

understanding, the administrator of an ERISA plan must provide participants with a written

explanation regarding waiver of the Husband-and-Wife survivor annuity that is “in a manner

calculated to be understood by the average participant.” 26 C.F.R. § 1.417(a)(3)-1 (a)(4). From

this, Stamper argues that the manner in which the Trust presented the 120 Payment Option did not

adequately inform her that she “was actually electing to receive less than 120 Payments from the

election date going forward.” Doc. 29 at 25. Stamper concludes that, because she did not

understand the retroactive start date, the waiver was ineffective. Id.

The Court notes that Stamper has not cited authority defining “manner calculated to be

understood by the average participant”—only that she apparently did not understand it. The Court

declines to define that Treasury Regulation here because the record establishes that the Trust

reasonably concluded that Stamper’s waiver was valid. By affirmatively electing the 120-month

option, Brown and Stamper sought to waive the Husband-and-Wife Pension two times—with their

first attempt on May 5, 2008, and their second on June 18, 2009. Doc. 26-7 at 46, 64. Stamper also

disregards the fact that the pension calculations on the written benefit explanations remained the

same over the span of March 2008 through July 2009. Id. at 56-58, 67-69. Given that a later ASD

for the converted Disability Pension would alter those calculations in accordance with the Plan

terms, it is clear to the Court that the time of conversion was independent of the structure of the

120 payments. Moreover, Brown’s letter to the Trust in June 2009 provides an exact amount that

he would receive based on the 120 Certain Payment monthly income from December 2006 through

July 2009, less repayment of his Level Income payments. /d. at 54. Brown’s June 2009 letter

acknowledges the “total of 21 months” that he had been receiving Level Income under his Early

Retirement Pension since his pension ASD. /d. Stamper and Brown received $45,816.46 upon

conversion to the Disability Pension in September 2009—with the monthly benefit extending to

December 1, 2006. Taken together, the Court finds that the Trust reasonably concluded Stamper’s

waiver was valid and its explanations not deficient.

IV. CONCLUSION

The record reflects that the Trust took great care to accommodate the request to convert

Brown’s Disability Pension and to ensure payment according to the terms of the Plan. There is no

dispute that, if Brown’s ASD was October 1, 2007, and if the 120 Certain Payment Option was

validly elected, then Brown had received more than 120 monthly pension payments at the time of

his passing. The Trust reasonably construed the Plan when it determined that the ASD for Brown’s

converted Disability Pension was October 1, 2007. Further, the election to waive the Husband-

and-Wife annuity and receive the Disability Pension in form of a 120 Certain Payment Option was

valid and not contrary to law. Because Brown had received more than 120 monthly Disability

Pension payments between October 2007 and his passing in December 2017, Stamper was not

entitled to further monthly Disability Pension benefits from the Trust. Stamper makes no other

claim for survivor benefits under the Plan. Accordingly, Stamper has failed to meet her burden of

establishing entitlement to benefits, and therefore, her claim is DENIED.

——_—_

TERENCE C. KERN

United States District Judge

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