Increasingly, retirees in Chicago and elsewhere in the country have faced hostility and needed to engage pension lawyers when seeking their pensions from former employers. Most commonly, the retiree stopped working for the employer through which earning the pension credits sometime before actually retiring. Then when the retiree makes the pension claim, the employer contends there is no record of earning pension credits, or even of having worked for the employer! At that point, there is nothing a retiree can do but hire a pension lawyer and go to court. But how does a retiree prove an entitlement to benefits in the face of such strict precedent on discovery in ERISA § 502(a)(1)(B) litigation being limited to the administrative record—which surely does not contain the proof you need it to contain? This exact issue arose in a case I handled last year on behalf of a foreign retired ship engineer for Alcoa, Simlesa v. Alcoa, Inc., No. 15-1506 (N.D. Ill.). We briefly covered the discovery dispute in that case here.
More recently, in Estate of Barton v. ADT Security Services Pension Plan, No. 13-56379, 2016 U.S. App. LEXIS 7216 (9th Cir. Apr. 21, 2016), Mr. Barton made a pension claim to Tyco, who took over ADT, after Barton allegedly worked enough years with ADT to earn a pension under the ADT pension plan. Barton came forward with copies of key cards and ADT issued identification cards, W-2 statements, pay stubs, personnel paperwork listing his salary level, and Social Security records documenting receiving payroll taxes on his behalf from ADT. The committee also reviewed Barton’s resignation letter, exist interview questionnaire listing first date of employment, and an ADT memorandum confirming Barton returned all firm property upon resignation. The committee nevertheless denied Barton’s claim, stating there was no record of him participating in the pension plan, and the documentation Barton supplied could not prove Barton satisfied the 10 years of continuous service required for participation (this was before the changes to vesting rules significantly shortening the maximum cliff vesting period to 5 years for defined benefit plans). For a good primer on retirement plan rules, see the Department of Labor’s publication, What You Should Know About Your Retirement Plan.
Barton sued under ERISA § 502(a). Initially, the district court ruled against Barton, holding it was not arbitrary and capricious for the committee to deny the claim on the basis of the record before it. The United States Court of Appeals for the Ninth Circuit, however, reversed, holding Barton proved enough to then force the burden to shift to ADT (vis-à-vis Tyco) to show that Barton did not meet the continuous service requirement. All the records of Barton’s employment were in Tyco’s control, and it would be inequitable to force retirees to have the documentation to prove that is only in the possession and control of their former employers, who seek to profit by concealing that evidence.
If you earned a pension from an employer that you left before retiring, and the employer denied your claim for a pension, speak with an experienced ERISA pension lawyer today.