ERISA Pension Claims Often Turn on Plan Interpretation; The Right Pension Lawyer Can Make a Difference

ERISA pension plans are peppered through the country, though the lawyers who know the plans’ inner workings and represent individuals are rare.  Nowhere are there more pension plans than in Chicago, largely due to the strong presence of organized labor and union pension funds.  If you’ve lived in Chicago for any period of time, you either have a pension, are on your way to a pension, or have a neighbor or friend who does.  Most claims for pensions go smoothly, and the facts are not in dispute.  But some claims present atypical circumstances, and in those cases, plan interpretation becomes the paramount issue.  A recent case from the East Coast demonstrated the troubles a pension claimant can have, especially this one where he was on long term disability leave for 15 years before his normal retirement date.

In Dowling v. Pension Plan for Salaried Employees of Union Pacific Corp. & Affiliates, No. 16-1977, 2017 U.S. App. LEXIS 17863 (3d Cir. Sept. 15, 2017), Dowling went on long term disability leave 15 years before his retirement date.  The parties’ disputed how the plan required calculation of his “Final Average Compensation” to which those years of service would apply.  The plan stated that Final Average Compensation is the average of the highest three years of compensation while the participant is a “Covered Employee,” and participants on long term disability cease being Covered Employees on their disability date.  Moreover, other provisions stated that the participant on long term disability leave earns continued years of service “as if he were still a Covered Employee.”  Other provisions dealing with “absences”, however, persuaded the court that Union Pacific could apply Dowling’s base salary (which was much less than his overall compensation before becoming disabled) to all years he was out on long term disability, and use those years as his final average earnings during the 10-year period prior to pension commencement.  The dissenting judge’s opinion appeared to hit the mark, but two of his peers outvoted him resulting in a split decision for the pension plan.

The lesson from this case is that how your ERISA pension lawyer argues the necessary interpretation against the backdrop of an arbitrary and capricious standard of review is your only hope of success.  We faced a similar uphill battle with pension plan interpretation in Schane v. International Brotherhood of Teamsters Union Local No. 710 Pension Fund, 760 F.3d 585 (7th Cir. 2014) where Michael Bartolic successfully persuaded all three appellate judges that the word “or” when used in the context of defining “retired,” actually meant “and,” which was no easy task when faced with the highly deferential standard of review given to pension plan administrators.

If you have a claim for pension benefits and receive a claim denial or adverse decision, you will only have 60 days to perform an internal appeal, and thereafter sue for your benefits under ERISA § 502(a).  The sooner you consult an ERISA pension lawyer, the better.