The opinion of the court was delivered by: Wolin, District Judge.
This matter is opened to the Court on defendant's motion for summary
judgment. The Court has considered the written submissions of the parties
as well as the arguments of counsel made in open court on June 14, 2001.
For the reasons discussed below, the Court will grant summary judgment in
favor of defendant. Plaintiffs' complaint will be dismissed.
Plaintiffs are seven former members of Teamsters Local No. 863 ("the
Union") and participants in defendant pension fund. Defendant is
Teamsters Local No. 863 Pension Fund ("the Fund" or "the Pension Fund"),
a multiemployer pension fund governed by the Employee Retirement Income
Security Act ("ERISA") and jointly administered by employer and union
trustees. Pursuant to the Declaration of Trust Agreement establishing the
Fund, the Fund is governed by ten Trustees, five selected by the Union
and five selected by the participating employers. Daniher Aff. ¶ 3.
Employers contribute to defendant Pension Fund at rates agreed to by
employers and the Union and set forth in the collective bargaining
Plaintiffs were all employees of Wakefern, the warehouse and
distribution company servicing Shop-Rite. Plaintiffs all commenced
employment with Wakefern in the 1960's and all retired between December
19, 1997 and January 30, 1998. Plaintiffs' retirements entitled them to
retirement benefits from the Pension Fund.
The amount of benefits is determined by a formula based on the number
of years of service ("creditable service") multiplied by a factor
predicated upon the last contribution rate for which contributions were
received by the Fund prior to the employee's retirement. It is,
therefore, common practice for employees who are at or near retirement
age to wait to retire until an increase in the rate occurs. All
plaintiffs in this case benefitted from an increase that took effect
November 1, 1997; their benefits were based on a contribution rate of
$3.17. Dft.'s Undisputed Facts, at II.D, II.E.
1. Changes in the Years of Creditable Service
The dispute at the heart of this case relates to the years of
creditable service rather than to the contribution rate applied to the
calculation of benefits. Until April 1, 1998, the cap on the maximum
number of years of creditable service that the Fund would use in
calculating pension benefits was thirty years for all participants,
regardless of who their employer or bargaining unit was. Id. at III.A.
Effective April 1, 1998, however, the number of years was increased to
thirty-five. Id. at III.B. In other words, before April 1, 1998, an
employee who worked more than thirty years received no credit for those
additional years in the calculation of his pension benefits. After the
change was instituted, every year up to thirty-five entitled the
participant to additional benefits.
Plaintiffs' lawsuit charges that defendant breached its fiduciary duty
to plaintiffs in failing to inform them that the change was being
considered and that they might be eligible for increased benefits if they
waited to retire.
The process leading to the increase in years of creditable service
began in April 1997, when the Fund retained a legal consultant, Thomas
J. Hart, of the Washington, DC, law firm of Slevin & Hart, P.C., to
prepare a fully restated Pension Fund Plan. Id. at III.C. During the
Summer and Fall of 1997, Hart reviewed the Plan and conferred with the
consultant, actuary and attorney regarding the history, interpretation
and administration of the Plan. Then, in October and November of 1997,
Hart began drafting a new Plan. At that time, he did not consider
changing the Plan's maximum of thirty years of creditable service. Id. at
The first draft of the restated Plan was completed on December 2,
1997, and a second draft was completed two days later. The second draft
was distributed to the Plan's advisors — Joseph Tramontana (Union
Business Agent and Fund Trustee), Anthony Miranda (Plan
Consultant/Administrator), Stanley Weisleder (Fund Actuary) and Andrew
Zazzali (Fund Attorney) — upon its completion. Neither the first,
nor the second draft changed the years of creditable service. Id. at
In November 1997, Tramontana first conceived of the idea of increasing
the years of creditable service as a means of stemming a growing tide of
retirements among senior members of the Union. Tramontana believed that
the growing number of retirements was linked to the fact that once a
member reached thirty years of service, there was little incentive to
continue working because his/her pension could only grow as a result of
contribution rate increases and not for additional years of service.
Tramontana, thus, decided to explore increasing the years of creditable
service. Id. at III.G.; see also Tramontana Aff. ¶ 8.
Of his own accord and independent of the ongoing review and restatement
of the Plan by Hart, Tramontana asked the actuary, Weisleder, to do a
preliminary check into whether the Fund could afford to increase the cap
on years of creditable service. Dft.'s Undisputed Facts, at III.H.;
Tramontana Aff. ¶¶ 6, 7, 9. In response to Tramontana's request
Weisleder performed a computer calculation of the impact on the Pension
Fund if the number of years of creditable service was increased to
forty-two years. In late November 1997, Weisleder reported to Tramontana
and Miranda that he had found that the Pension Fund could not increase
the cap to forty-two years, but that it might be able to increase it by a
somewhat smaller amount, to say thirty-five years. Tramontana Aff.
¶ 9. However, Weisleder made clear that he had not done the analysis
for thirty-five years and that, should the Fund consider such a change,
he would have to do a flesh analysis. Dft.'s Undisputed Facts, at
III.J.; Weisleder Aff. ¶ 6.
After Tramontana reviewed the December 4 draft, which, as previously
noted, did not include any change in the years of creditable service, he
spoke with Miranda, Zazzali and Hart regarding his idea. Tramontana was
advised that an increase to thirty-five years would have to be approved
by the actuary and the Trustees. Tramontana Aff. ¶ 12. Tramontana
asked that Miranda propose having the draft revised to reflect an
increase in the years of creditable service to thirty-five. Dft.'s
Undisputed Facts, at III.L.
On December 8, 1997, Hart participated in a conference call with
Miranda and Weisleder regarding the December 4 draft. On that call, Hart
was asked to increase the maximum years of creditable service to
thirty-five for the proposal being submitted to the Trustees at their
scheduled December 9, 1997 meeting. Id. at III.M; see also Hart Aff.
¶ 6 ("It is my recollection that I was requested to modify the number
of years of service recognized by the plan on or about December 8, 1997.
. . . It is further my recollection that I was directed to make the
change because the Union Trustees wished to have the matter of
recognizing additional years of service discussed, and voted upon, by the
Board as a whole."). Hart thus prepared
a revised version of the December 4 draft for the Trustees, which
included, for the first time, the proposed increase in years of
creditable service. Dft.'s Undisputed Facts, at III.N; see also
Tramontana Aff. ¶ 13; Hart Aff. ¶¶ 6, 7.
At the December 9, 1997, Trustees meeting, Hart reviewed with the
Trustees the various changes that were proposed in his restated Plan.
Regarding the increase in years of creditable service, Hart informed the
Trustees that no actuarial study had been performed. Hart Aff. ¶ 7.
The Trustees requested that the actuary and the Fund's attorney review
the Fund's finances to determine whether the Fund had sufficient
resources to accommodate this change. Dft.'s Undisputed Facts, at
III.P.; Tramontana Aff. ¶ 18; Weisleder Aff. ¶ 10. The two were
to report back to the Trustees before the next scheduled Trustees meeting
on January 20, 1998. The Trustees did, however, approve the restated
pension plan, including the increase in years of creditable service,
"contingent upon the reviews of the Fund professionals and Trustees."
Exh. E to Dft.'s Brief (Minutes of the December 9, 1997 Meeting of the
Trustees); see also Hart Aff. ¶ 6 ("It was my understanding that the
restatement was approved on this contingent basis because some Trustees
felt that they might need additional time to review the document and
because they looked to their advisers to report on any adverse cost
implications . . ."); Tramontana Aff. ¶ 18 ("After a discussion of
all of the revisions, the Trustees decided that they seemed acceptable,
but they wanted the actuary and the Fund's own attorney to review the
Fund's finances to see if the increase in years of creditable service
from thirty to thirty-five was acceptable to the Plan."); Weisleder Aff.
¶ 10 ("The Trustees voted to approve the revisions, except that as to
the proposed increase in years of creditable service, they asked me to do
a cost study and to report back to them before the January 20, 1998
meeting as to whether the change was feasible.").
Following the December 9, 1997 meeting, Weisleder reviewed the figures
and found the proposal financially acceptable. The Trustees were informed
of his findings at their January 20, 1998, meeting. Dft.'s Undisputed
Facts, at III.R, S. The Trustees then discussed implementation issues,
including when the change should become effective, id., at III.S, how and
when notice of the change had to be made, and the procedure for obtaining
approval from the Internal Revenue Service. See Exh. F to Dft.'s Brief;
see also Daniher Aff. ¶ 17 (At the January 20, 1998 meeting, the
Trustees "discussed the issues of implementation: when would [the change]
take effect, what type of notice they would have to give of the change,
and when they would have to give notice in relation to the change.").
Hart advised the Trustees that they had to give at least 60 days'
notice. The Trustees, therefore, voted to approve the increase effective
April 1, 1998. See Hart Aff. ¶ 8.
2. Plaintiffs' Inquiries and Knowledge Regarding Possible Plan Changes
As will become more clear in the legal analysis below, the success of
plaintiffs' complaint turns in large part on the occurrence and timing of
inquiries by plaintiffs regarding possible changes to the Plan.
Therefore, the Court will lay out the dates and circumstances of each
plaintiffs inquiries regarding possible increases in his retirement
During the fall of 1997, Mushalla, a shop steward, periodically asked
Mariano whether there was going to be any increase in benefits provided
under the Plan. According to Mushalla, the last time he made such an
inquiry was on December 20, 1997. See Mushalla Dep. 24:1-6; Appendix to
Deft.'s Brief, Exh. Q (Mariano Affidavit). On each occasion, up to and
including December 20, 1997, Mariano indicated that no increases were
contemplated at that time. Mushalla Dep. 23:20-24:15.
On December 7, 1997, at a meeting of the general membership of the
Union, Tramontana announced that an increase in years of creditable
service, from thirty to thirty-five, was under consideration. Mushalla
was the only plaintiff present at this meeting. Tramontana also informed
the membership that a buyout of approximately 200 Pathmark employees was
being contemplated. He provided no other information regarding the
It appears that Mushalla was the only one in attendance at the meeting
who came away with the understanding that the change in years of
creditable service related to the Pathmark buyout and did not apply to
all Plan participants. Others at the meeting understood that Tramontana
was discussing two separate issues, and that the change in years of
creditable service under consideration would affect all Union members.
See Dft.'s Uncontested Facts, at IV.F-J; Appendix to Deft's Brief, Exh. R
(Rufolo Affidavit); Exh. S (Cascarelli Affidavit); Exh. T (Betza
Affidavit); Exh. U (O'Mara Affidavit).
Mushalla also asked Mariano about buy-outs and increases in the
contribution rates, but not about changes in the years of creditable
service. His last inquiry of Mariano was no later than December 20,
1997. Mariano informed Mushalla that he did not know of any anticipated
changes. Mushalla Dep. 24:1-15.
Mushalla submitted his retirement papers on November 11, 1997 and
retired on December 26, 1997.
Szwast testified that, on approximately a dozen different occasions
during November and December 1997, he inquired of Daniel Mariano, a Union
business agent and Fund Trustee, whether there was any chance that the
pension amount would increase in the near future. Mariano replied, on each
occasion, either that he did not know or that the pension was not going
to go up. Szwast Dep. 41:3-11; 43:18-44:7.
Szwast also testified that he decided to retire in November 1997,
effective January 1998, and that on November 19, 1997, he completed the
paperwork for his retirement and submitted it to his shop steward,
Szwast retired on January 30, 1998.
Fritzinger asked Mushalla, his shop steward, every week for several
months before he decided to retire whether there would be any increase in
the pension. Mushalla always answered in the negative, so Fritzinger
ultimately decided to retire. He submitted his paperwork on August 12,
1997. After that, Fritzinger did not speak with any union business agents
or business delegates regarding his benefits. Fritzinger Dep. 24:15-22.
Fritzinger retired on December 19, 1997. There is no indication that
Fritzinger made any inquiry of anyone, whether from the Union or the
Fund, after his retirement.
Garcia testified that he never made inquiry of any Fund or Union
representative concerning possible changes to the Fund. Garcia Dep.
26:12-17. Before submitting the paperwork regarding his anticipated
resignation, Garcia asked Mushalla several times whether there were going
to be any increases in pension benefits. Mushalla told him ...