Monks v. Keystone Powdered Metal Co.

Citations: 78 F. Supp. 2d 647; 2000 U.S. Dist. LEXIS 352; 2000 WL 30061Docket: 98-74379

Court: District Court, E.D. Michigan; January 12, 2000; Federal District Court

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Plaintiff Douglas Monks filed a lawsuit against Keystone Powdered Metal Company on October 8, 1998, alleging two main claims: (1) the company underpaid his benefits under the Group Pension Plan for Salaried Employees, and (2) it failed to notify him of deferred pension benefits upon reaching age 65 while still employed. The court has jurisdiction over these claims under the Employee Retirement Income Security Act of 1974 (ERISA).

In May 1999, both parties filed cross-motions for summary judgment, with oral arguments heard on December 21, 1999. However, the court noted that, per Wilkins v. Baptist Healthcare Systems, summary judgment is inappropriate for ERISA benefit claims. Count I, which pertains to the claim for benefits, must be resolved by reviewing the Plan administrator's decision based solely on the administrative record. Conversely, Count II, which addresses the failure to provide proper notice regarding deferred benefits, is suitable for summary judgment under Fed. R. Civ. P. 56.

Monks was employed by Keystone's predecessor since April 1964 and retired in July 1998, during which time he was a participant in the pension plan funded entirely by employer contributions. Following his retirement, a dispute arose concerning the correct amount of pension benefits he should receive, which constitutes the basis for Count I of his Complaint.

The Plan in question is a "defined benefit excess" plan, which is characterized by benefits determined by a formula rather than contributions, as defined by the Internal Revenue Code. Specifically, benefits are calculated using a "unit credit" formula based on years of service and average monthly earnings. Prior to January 1, 1989, the formula consisted of three components: (a) 0.4% of Average Monthly Compensation up to $600, (b) 1.6% of Average Monthly Compensation exceeding $600, and (c) 0.5% of Average Monthly Compensation for years of service beyond 25 years. For the first 25 years, the Plan operated as an "excess" plan due to a higher percentage applied to earnings above the integration level; however, after 25 years, it ceased to be classified as such, applying the same percentage to both earnings levels.

The Tax Reform Act of 1986 (TRA) significantly impacted the Plan by reinforcing non-discrimination rules under the Internal Revenue Code, specifically prohibiting disproportionate benefits to highly compensated employees. The TRA also established a $150,000 cap on annual compensation considered for benefits under tax-qualified plans. Furthermore, the TRA introduced a maximum permitted disparity of 0.75% between the benefit percentages for earnings below and above the integration level. The pre-1989 Plan did not comply with these regulations, as the disparity between its sub-integration and super-integration percentages far exceeded the allowable limit.

The disparity of 1.2% exceeded the 0.4% threshold for calculating benefits for earnings below the $600 integration level, prompting the Defendant to amend its pension plan in June 1993, retroactive to January 1, 1989. The new benefit calculation formula includes: (a) 0.7% of Average Monthly Compensation up to $600 for up to 25 years of Credited Service; (b) 1.35% of Average Monthly Compensation in excess of $600 for up to 25 years; and (c) 0.5% of Average Monthly Compensation for years of service beyond 25 years. However, this modification alone did not ensure compliance with the Tax Reform Act (TRA) because it could reduce retirement benefits for highly compensated employees, violating IRC provisions against decreasing accrued benefits. Although the TRA set an effective date of January 1, 1989, the relevant Treasury regulations were not issued until 1991 or later, leaving plan sponsors in a difficult position. To mitigate this, the IRS released a Notice on December 27, 1988, offering model amendments for plan sponsors to maintain tax-qualified status without violating IRC provisions. The final regulations included "fresh-start" rules allowing compliance with the TRA without disadvantaging participants. These rules provided three options for transitioning to post-TRA formulas: (1) "fresh-start without wear-away," (2) "fresh-start with wear-away," and (3) "fresh-start with extended wear-away." The Defendant chose the third option in its 1993 amendment, which applies the formula yielding the greatest benefit for each participant, integrating both previous fresh-start formulas.

The parties have agreed that the Plaintiff benefits more from the "fresh-start without wear-away" formula outlined in the Plan. This formula calculates retirement benefits by combining the accrued benefits under the pre-TRA formula as of December 31, 1988, with benefits accrued from January 1, 1989, to December 31, 1997, under the post-TRA formula. The complexity lies in determining "Credited Service" years for post-TRA calculations. 

In September 1990, the Plaintiff requested a calculation of his retirement benefits. The Defendant's Human Resources Director provided two worksheets: one showing accrued benefits under the pre-TRA formula at $4,547.71, based on 25 years of service until 1988, and another under the post-TRA formula totaling $4,547.69, which included an additional eight years of service up to normal retirement age. 

On June 25, 1997, the Plaintiff requested another calculation for a projected retirement date of January 1, 1998. In response, a letter from the Plan’s actuary on February 23, 1998, provided four different benefit calculations: (1) $4,547.71 under the pre-TRA formula, (2) $4,747.50 under the post-TRA formula, (3) $4,586.99 also under the post-TRA formula but segmented by time periods, and (4) $5,106.64 calculated using the "fresh-start without wear-away" method. This last figure represented the total projected monthly retirement benefit, based on a retirement date of December 31, 1997.

On April 8, 1998, the Plaintiff communicated with Defendant's chief financial officer, C.J. Kogovsek, disputing the benefit calculations presented in a February 23, 1998 letter, claiming he was entitled to over $6,000 monthly based on his own calculations of service years. Kogovsek replied on April 9, 1998, affirming the accuracy of the original calculations. Following the Plaintiff's retirement on July 1, 1998, the Defendant disbursed retirement benefits according to the February letter, prompting the Plaintiff to file a lawsuit. In Count I, he seeks additional benefits under the post-TRA formula, while Count II alleges the Defendant failed to notify him of the deferral of his retirement benefits, contrary to ERISA and the Plan's requirements.

The Court must first establish the standard of review for the Plaintiff's claim for additional benefits. The Plaintiff argues for a de novo review, while the Defendant asserts that the "arbitrary and capricious" standard should apply. The Court supports the Defendant's position, noting that under ERISA, a participant can sue to recover benefits, with standard review being de novo unless the plan grants the administrator discretionary authority. The Plan’s language indicates that the administrator has the authority to resolve factual disputes and interpret the Plan's terms, thus triggering the "arbitrary and capricious" standard. The Court concludes that this discretionary authority is valid despite the Plaintiff's assertion that it is limited by subsequent language regarding appeals, emphasizing that the administrator's determinations are final and binding unless appealed.

Plaintiff has appealed the administrator's decision, arguing that the non-final nature of this determination undermines the administrator's discretionary authority. However, no supporting case law has been identified by Plaintiff or found by the Court, raising concerns about the broad implications of this argument. If accepted, it could imply that plan administrators lack discretion in all federal court cases due to the review process, which does not negate their initial authority.

Additionally, Plaintiff contends that the administrator's interpretation of the Plan constitutes an amendment, suggesting that a de novo standard of review should apply. This reasoning is criticized as circular and impractical, as it would require preliminary determinations about the nature of the administrator's interpretations, conflicting with established precedents that dictate the standard of review should be based solely on the Plan's terms.

The Court concludes that the "arbitrary and capricious" standard governs the review of the challenged decision. This standard allows the Court to uphold a benefit determination if it is rationally supported by the Plan's provisions. Though the Court generally defers to the administrator's decisions, it acknowledges two factors that may influence the review: the financial incentive of the Defendant to minimize benefits and the application of the "rule of contra proferentum" to any ambiguous Plan language, favoring the interpretation against the Defendant.

Applying these standards, the Court will evaluate the administrator's determination of Plaintiff's retirement benefits. Ultimately, Plaintiff alleges that the administrator misapplied the post-TRA formula for calculating his benefits.

Plaintiff argues that Defendant incorrectly counted his post-1988 service years as "years of Credited Service in excess of twenty-five (25) years" under the post-TRA formula, instead of treating the years 1989-1993 and 1994-1998 as transitional periods. The Court, however, finds Defendant's interpretation of the Plan language to be rational and reasonable. The dispute centers on the application of the post-TRA formula, which specifies the calculation of Monthly Retirement Income based on years of Credited Service. 

Under the formula, the first portion calculates benefits based on the first $600 of Average Monthly Compensation for up to 25 years, while the second portion addresses earnings beyond that threshold. Since Plaintiff reached 25 years of service in 1988, any additional years would only increase his benefit by 0.5%. The complexity arises from the "fresh-start" rules established for the transition to the post-TRA formula, which aim to protect accrued benefits for participants. 

These rules allow for the calculation of benefits based on the pre-TRA formula for service through 1988, followed by a recalculation for service from 1989 to 1993 using the post-TRA formula. Defendant's computation for this period set the "years of Credited Service" in parts (a) and (b) of the post-TRA formula to zero, while assigning five years for part (c) concerning service beyond twenty-five years.

Defendant argues that Plaintiff's service from 1989 to 1993, following 25 years of service completed before 1989, qualifies as "years of Credited Service in excess of twenty-five (25) years" under part (c) of the post-TRA formula. Consequently, Plaintiff's monthly benefit increase for these years is calculated at 0.5% of his average monthly compensation for that period. In contrast, Plaintiff contends that his benefit during 1989-93 should reflect five years of "Credited Service," with the excess years considered zero. He asserts that these years should increase his retirement benefit by 0.7% and 1.35% of relevant earnings, rather than the flat 0.5%.

The parties also disagree regarding benefits calculation for service years from 1994 onward. Defendant claims these years (31st to 35th) fall under part (c) of the formula, while Plaintiff argues they should be classified as years zero through five of "Credited Service on or after January 1, 1994," governed by parts (a) and (b). The Court finds Defendant's interpretation more plausible and rational, satisfying the "arbitrary and capricious" review standard. The Plan defines "Credited Service" as the total years credited for calculating retirement benefits, suggesting a holistic approach to determining service years rather than a segmented one based on specific periods. The language of the fresh-start rule, while somewhat ambiguous, does not definitively support Plaintiff's position.

Plaintiff's "Credited Service" for the 1989-93 plan years is interpreted to include his 26th to 30th years of service, while his "Credited Service on or after January 1, 1994" includes his 31st to 35th years of service. Each of these years qualifies as "in excess of twenty-five (25) years" under the post-TRA formula, which increases Plaintiff's monthly benefit by 0.5% of his average monthly compensation based on the relevant periods. The argument revolves around whether the years of service should be reset to zero for calculating benefits under the plan's three-part formula. While Plaintiff contends that the Defendant's interpretation renders his service years between 1989-93 and 1994-98 to zero, the Court finds Defendant's interpretation rational and not arbitrary. The complexity of the benefits calculation does not imply ambiguity; rather, it is designed to transition from the pre-TRA to post-TRA formula while preserving vested benefits and complying with Treasury regulations. Traditional contract interpretation principles support the Defendant's position, emphasizing that contract provisions should be understood as part of an integrated whole. Accepting Plaintiff's interpretation would make part (c) of the post-TRA formula inapplicable to any employee's benefits calculation for the 1989-93 period.

Plaintiff's proposed interpretation of "Credited Service" conflicts with the Plan's definition, which counts total calendar years worked without partitioning them into distinct periods. This interpretation risks yielding an illegal outcome, as contracts should not produce results contrary to legal principles. The Treasury regulations stipulate that any permitted disparity in a defined benefit excess plan must be uniform, meaning it requires consistent benefit percentages across employees with the same years of service. Plaintiff’s interpretation would create unequal benefits for employees with the same total service years, favoring those with service before the "fresh-start" date of January 1, 1989. For example, an employee with service starting before 1989 would benefit from a more advantageous excess formula, while those starting afterward would receive limited benefits under a less favorable provision. This discrepancy violates the "uniform disparity" requirement.

Furthermore, Plaintiff’s interpretation would exacerbate existing violations of the maximum total disparity limit under the Internal Revenue Code (IRC). The regulations prohibit disparities exceeding 0.75% between earnings percentages, establishing a lifetime maximum disparity that cannot exceed 0.75% multiplied by years of service. For an employee like Plaintiff, who has 35 years of service, the maximum allowable disparity would be 26.25%. However, under the pre-TRA formula, Plaintiff accumulated a 30% excess allowance, surpassing this limit. If his interpretation were applied, he could continue to exceed the maximum allowance by increasing his excess benefits until his retirement, contrary to both the TRA and IRC provisions.

Plaintiff's interpretation of the Plan would increase non-compliance with the TRA regarding pre-TRA employees. The Court emphasizes the TRA's goal to eliminate discrimination favoring highly compensated employees. The "fresh-start" rules from the Department of Treasury, integrated into the Plan, aim to transition towards this goal while safeguarding vested interests. Defendant's interpretation supports these objectives by phasing in the post-TRA formula while maintaining Plaintiff's accrued pre-TRA benefits, which increased from $4,547.71 in 1988 to $5,169.98 at retirement in 1998. Plaintiff benefits from 25 years of pension calculations under the pre-TRA formula, which has a greater disparity than currently allowed under the TRA. In contrast, Plaintiff's proposed interpretation would allow for an excessive accumulation of benefits beyond the pre-TRA limit, contradicting the intent of "grandfathering." The Court finds Defendant's interpretation rational and consistent with the TRA's purposes. 

Regarding potential conflicts of interest, the Court concludes that Defendant's financial stake in Plan funding does not invalidate the benefit determination, as there is no evidence suggesting that the decision was influenced by this financial interest. The Court cites relevant case law to support this conclusion, indicating that a mere financial conflict does not warrant overturning a decision absent specific evidence of bias.

The defendant's conflict of interest is cited as evidence of an arbitrary and capricious denial of benefits, highlighting "procedural peculiarities" in the claim review process. Despite these concerns, the Court finds that the defendant's benefit determination meets the arbitrary and capricious standard. In Count II of the Complaint, the plaintiff claims the defendant violated ERISA and the Plan by not notifying him about the deferral of retirement benefits upon reaching age 65 while still employed. Both parties have filed for summary judgment, agreeing there are no material fact disputes but differing on applicable law. 

The standards for summary judgment under Fed. R. Civ. P. 56 require that there be no genuine issue of material fact for the moving party to be entitled to judgment as a matter of law. Landmark Supreme Court cases have clarified that the burden on the movant is lowered; they must show the absence of key evidence from the non-movant’s case and cannot merely rely on the possibility that the trier of fact will disbelieve the movant's claims. The trial court now has discretion in assessing the respondent's evidence and is not required to sift through the record for issues of material fact. The respondent must provide affirmative evidence to counter the summary judgment motion, and if the overall record does not support a rational finding for the respondent, the motion should be granted.

The Court will evaluate the parties' cross-motions for summary judgment concerning Count II of the Complaint. It acknowledges that while the Defendant failed to provide proper notice under the Plan, this failure does not grant the Plaintiff the remedy he seeks. The Plan specifies a "Normal Retirement Age" of 65, which the Plaintiff reached on June 3, 1996. Had he retired that day, he would have begun receiving monthly benefits calculated from that date. However, the Plaintiff chose to continue working until his retirement in July 1998 at the age of 67, thus delaying the commencement of benefits until that time. The Plan's terms state that benefits start on the actual retirement date. During the additional two years of employment, the Plaintiff's retirement benefits accrued at a rate of 0.5% based on his average monthly earnings.

The Defendant did not provide the required written notice in June 1996 that benefits would not begin until his retirement. The Plaintiff argues that such notice was mandated by both ERISA and the Plan's terms, particularly in section 4.09, which outlines the notice requirement for employees working past the Normal Retirement Age. The Defendant concedes that the Plan administrator failed to comply with this requirement. The Plaintiff's claim of an ERISA violation is based on 29 U.S.C. § 1053(a)(3)(B), which states that accrued benefits should not be considered forfeitable due to the suspension of payments while an employee continues to work. However, the plain language of this provision does not mention any notice requirement, and the Defendant maintains that it is not applicable since the Plaintiff's benefits had not commenced at the time he reached retirement age, and thus were not suspended or treated as forfeitable.

Defendant continued to accrue pension benefits for a plaintiff who worked past retirement age, with full payment upon actual retirement. The Department of Labor (DOL) regulations require notification of withheld pension benefits during continued employment, specifically outlining a "suspendable amount" above which benefits cannot be permanently withheld. The regulation defines "section 203(a)(3)(B) service" as employment after benefit payments would have commenced. Although Defendant argues that the DOL regulation exceeds ERISA's scope by applying to situations where benefits have not yet commenced, the court refrains from adjudicating this issue due to the Plan's own requirements for notice of withheld payments. Since the Plan incorporated the DOL regulation, Defendant is obligated to provide notice, which it failed to do. Consequently, the focus shifts to the proper remedy for this violation. Plaintiff asserts the right to choose between two options for his benefits: either the monthly benefit accrued during his additional two years of service or the actuarially adjusted value of his monthly benefit as of his normal retirement date, estimated at $6,480.97, surpassing his current amount of $5,169.98. Plaintiff cites a proposed Treasury regulation from 1988 to support his recovery theory, though this regulation does not address notice requirements or remedies for notice failures.

Defendant references the Sixth Circuit's ruling in *Lewandowski v. Occidental Chemical Corp.*, which determined that ERISA does not permit damage awards for procedural violations related to notice and disclosure obligations in retirement plan administration. The court emphasized that 29 U.S.C. § 1132(c) allows for a fixed penalty up to $100 per day for such violations, but does not endorse broader damage recovery based solely on a plan administrator's failure to comply with notification protocols. Additionally, the court found that other rulings have consistently limited recovery to avoid creating new grounds not specified in ERISA.

Defendant also cites *Kent v. United of Omaha Life Ins. Co.*, where the Sixth Circuit accepted that while the procedures in question were technically deficient, they sufficiently conveyed the denial of a claim and the claimant's rights under Section 1133 of ERISA. Therefore, the Defendant argues that substantial compliance with notice requirements was achieved in this case. They point to Plaintiff's affidavit admission regarding expectations for pension benefits, requests for benefit calculations prior to retirement, and the Plan's provisions indicating that benefits commence upon actual retirement. Defendant argues that Plaintiff was aware of the deferral of benefits and that any purposes of notice were substantially fulfilled.

Furthermore, Defendant contends that the remedy sought by Plaintiff would not restore him but would instead result in an unwarranted windfall, as Plaintiff continued to accrue benefits and experienced salary increases, which enhanced his pension. This perspective aligns with the Seventh Circuit's decision in *Lunn v. Montgomery Ward Co.*, where a similar claim regarding benefit forfeiture was assessed and rejected.

The Retirement Security Plan (RSP) offered by Wards, the employer, includes a defined benefits component that guarantees retirees 1.5% of their total earnings until their retirement date. The plaintiff contended that the RSP discriminated against employees who retired later, as the accrual of benefits did not compensate for the actuarial losses incurred due to fewer years of receiving benefits. The Court initially dismissed this economic argument and noted that it did not align with ERISA provisions, specifically section 203(a) which ensures nonforfeitable retirement benefits upon reaching normal retirement age, as there was no forfeiture in Lunn's case; he could have retired at 65 without losing benefits. Additionally, section 204(b)(1)(H)(i) prohibits reducing benefit accrual rates due to age. Wards allowed Lunn to continue accruing benefits post-65 without any reduction, treating him the same as other employees. The Court highlighted that Lunn's argument could imply that all defined benefit plans violate section 203(a), as longer employment past normal retirement age may not yield proportional benefits due to decreased life expectancy. A hypothetical scenario illustrated that delaying retirement could result in significant forfeited benefits that might overshadow any additional accruals. The Court concluded that the potential actuarial disadvantage of late retirement does not constitute a violation of ERISA, nor does it necessitate plans to pay benefits upon reaching normal retirement age if the employee does not retire.

Lunn does not address notice issues but rejects the Plaintiff's claim that he "forfeited" benefits by working past the age of 65. The Court finds no support for the forfeiture concept, despite recognizing that relevant statutes and case law do not specifically resolve this matter. It notes that while it could be problematic if Defendant failed to notify Plaintiff about the deferral of benefits, this situation is different because Defendant continued to increase Plaintiff's pension benefits during his continued employment. Consequently, this accrual negates any entitlement to the actuarial equivalent of benefits had he retired at 65.

The Court also concludes that Defendant's failure to provide adequate notice under the Plan or ERISA did not harm Plaintiff, as he was already aware that pension benefits would not commence until retirement. The required notice includes details about benefit suspension, but the Court finds it unlikely that additional information would have informed Plaintiff of any risk of forfeiting benefits due to continued work past 65. Importantly, Plaintiff did not claim that more information would have altered his decision to work past retirement age.

Ultimately, the Court identifies no harm to Plaintiff from the lack of proper notice and finds no legal basis for the relief he sought. The principles from Lewandowski and Kent apply, leading to the conclusion that Defendant's procedural violation does not warrant damages. The Court orders that Defendant's Motion for Summary Judgment is granted, affirming the benefit determination challenged by Plaintiff, while denying Plaintiff's Motion for Summary Judgment.

Wilkins does not support a distinction where parties agree there are no disputed factual issues, as it broadly addresses the adjudication of claims under 29 U.S.C. § 1132(a)(1)(B) regarding benefits. The Court determines that Wilkins indicates no genuine issue of material fact arises when reviewing a plan administrator's denial of benefits, as the review is limited to the administrative record. Consequently, the Court cannot consider expert opinions, deposition testimony, or affidavits related to Count I of the Complaint about the denial of full Plan benefits, except for procedural challenges like alleged bias or lack of due process. The Plaintiff alleges a conflict of interest by the Defendant in its benefit determination, which could allow examination of additional evidence related to this claim; however, the submitted evidence does not appear relevant to this alleged conflict. The Court will establish findings of fact for Count I, while Count II's resolution hinges on identifying genuine issues of material fact. Since the parties agree on the operative facts, the findings serve both purposes. The Plan's $600 "integration level" was historically linked to Social Security retirement benefits, which are capped at a defined "break point" in annual earnings. This structure was established when the Social Security break point was also $600/month. Additionally, pension plan anti-discrimination rules are noted for their complexity, which complicates plan administration and increases costs, with "highly compensated employees" defined under the IRC as earning over $80,000.

Plaintiff was classified as a "highly compensated employee" during his employment with Defendant, with an annual salary that adjusts for cost-of-living increases as per 26 U.S.C. 401(a)(17)(B). Treasury regulations provide examples of "permitted disparity" rules for defined benefit plans, indicating that disparities in benefits must adhere to specific allowances. The Court notes that the Plan's amended formula meets non-discrimination requirements by ensuring that the disparity between sub-integration and super-integration percentages does not exceed certain limits.

An example illustrates a hypothetical employee, earning $103,200 annually in 1988 with 25 years of service, whose retirement benefits would decrease under the new formula from $3,260 to $2,805 monthly. The post-TRA Plan introduces a transitional calculation that divides benefits into three segments: pre-TRA benefits, benefits accrued from 1989 to 1993, and benefits from 1994 onward, likely to address the interim period around the TRA's effective date.

Key terms like Average Monthly Compensation and Credited Service are defined elsewhere in the Plan. Plaintiff did not receive a calculation of benefits using the "fresh-start without wear-away" method, which would consider benefits accrued under both pre-TRA and post-TRA formulas. Although Plaintiff referenced a calculation worksheet in a letter, it is not included in the court record. Defendant acknowledges an error in its calculations, though it disputes the nature of Plaintiff's claims regarding this issue.

Defendant acknowledged an error in calculating Plaintiff's average monthly compensation by using the years 1993-97 instead of the correct range of 1994-97, resulting in a $1.04 increase in Plaintiff's monthly benefit, which will be paid retroactively to his retirement date. The excerpt clarifies that the appeal process mentioned in Article VIII refers to an appeal to the Plan Administrator, which grants the Administrator the authority to amend prior decisions. Plaintiff contends that the Administrator's decisions should be reviewed under a de novo standard for legal interpretations, a stance that is not supported by the cited case law or by the Sixth Circuit’s rejection of such a standard for eligibility determinations. Furthermore, there is no indication that the calculation of Plaintiff's retirement benefits was affected by the Administrator's interpretation of federal law; rather, it was based on the Plan's language. The parties concur that one specific subsection yields the highest benefit for Plaintiff, leading to the omission of others. Testimony from Plaintiff's expert, Joseph Esuchanko, suggests alternative language that could clarify the formula’s intent, but it remains debatable whether these revisions would enhance clarity or better achieve Defendant's goals. The expert’s inability to propose a clearer alternative indicates that Defendant’s language was reasonable and sufficiently clear.

The plan offers a retirement benefit structured as follows: 1.0% of average annual compensation up to an integration level, plus 1.65% for any compensation exceeding that level, applicable for each year of service up to 25 years. For service beyond 25 years, the benefit is 1.0% of all average annual compensation. This benefit structure maintains uniformity across employees with the same years of service. A hypothetical scenario suggests that an employee's years of service from 1989 to 1993 would not count towards the 25-year limit, resetting their "clock" in 1994, requiring an additional 25 years of service post-1994 to reach the limit. The plaintiff argues this scenario is speculative, but it raises concerns about potential disparities that could affect the plan’s tax-qualified status under IRC 401 and Treasury regulations. The plaintiff, having completed 25 years of service by 1988, benefits from the pre-TRA formula without being impacted by subsequent changes. The administrative record does not reflect consideration of TRA goals in the benefit determination. The defendant claims a "constructive notice" defense, arguing the plaintiff has not shown harm from any lack of notice regarding benefits. However, the court notes a potential issue with the defendant's assertion that the plaintiff's benefits were never "suspended," particularly concerning provisions related to continued employment after age 65, implying that the entirety of the monthly benefit may be subject to suspension due to employer contributions.

The Department of Labor (DOL) recognizes that service beyond the normal retirement age may qualify as "section 203(a)(3)(B) service," provided relevant criteria are met, even in the absence of a formal retirement act. The commentary clarifies that the Plaintiff's employment after age 65 falls under this category. The case Atkins v. Northwest Airlines, Inc. supports this interpretation, explaining that "actuarial adjustment" aims to equate retirement benefits for employees who continue working past the normal retirement age, acknowledging that such employees typically receive benefits for fewer years. This adjustment compensates for that disparity by providing increased benefits. The Plaintiff's claims, which suggest that regulatory failures to notify participants about benefit suspensions automatically lead to entitlement for actuarially increased benefits, are incorrect. Furthermore, the Plaintiff misinterprets provisions of ERISA regarding notice deficiencies as granting the relief sought, though these provisions do not address such issues. Additionally, the pension plan in question integrates payments from the RSP plan with those from a defined contribution plan funded by the employee.