Disqualifying Employment
Despite that the pension plan allows qualified people who worked past 62 to receive a “late retirement benefit”, which is stated in their pension benefits, the plan’s committee refused to give him Grandson a bump. And that was wrong, according to U.S. District Judge Laura M. Provinzino. The Plumbers & Pipe Fitters United Association Local 11 and the Northern Mechanical Plumbing Contractors Association Inc. (NMPCA) noted that between 2007 and 2024, no employees who continued working in the industry received a bump in their retirement benefits, suggesting that allowing Grandson to receive increased payments would be inconsistent with prior practice. After he turned 62, Grandson continued working for the same employer, which the pension plan said prevented him from receiving increased retirement payments.
Judge Provinzino, however, pointed out that plan didn’t include a definition of “disqualifying employment” until 2015, and the definition was then amended in 2019 to include language barring workers from taking jobs in the same geographic area covered by the plan “at the time that the participant commenced benefits,” reported Law360. “Even crediting the limited evidence of consistency from 2019 to the present, the court is not persuaded that a consistently unreasonable interpretation should weigh in defendants’ favor.”
Disqualifying Employment is defined by the Plumbers and Pipefitters National Pension Fund as 40 or more hours per week working in the same industry, area and trade as those covered by the plan.
According to court documents, Grandson applied in 2021 for late retirement benefits that included the actuarial increase, but the trustees determined that Grandson didn’t qualify for the actuarial increase because he continued working and by doing so engaged in “Disqualifying Employment” under the plan rendering him ineligible for the more generous benefits. Grandson appealed and the trustees responded: they would only allow Grandson to submit additional arguments and evidence to support his claim if he would agree not to file suit and their determination on reconsideration would be considered a final determination of all arguments that were or could have been raised.
Grandson rejected their considerations. Next up, the committee said its administrative remedies are now exhausted and Grandson had until February 10, 2023 to file a civil lawsuit to contest the determination in federal court. Grandson filed his lawsuit against the plan and its board of trustees asserting claims for benefits and for breach of fiduciary duty under ERISA.
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Grandson argued, and the court agreed that, “Disqualifying Employment” could only begin after the participant commences benefits and any other reading of the term is nonsensical. “Grandson’s interpretation accords with the plain language of the Pension Plan’s definition of ‘Disqualifying Employment’ in effect at the time Grandson reached the normal retirement age, which explicitly contemplates that an employee engages in Disqualifying Employment only after ‘the participant commenced benefits.”
The case is Grandson v. Western Lake Superior Piping Industry Pension Plan et al., case number 0:23-cv-00214, in the U.S. District Court for the District of Minnesota.
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