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Claimant Denied Benefits From ERISA Plan Sponsored By Company He Never Worked For

Published by on April 15, 2008

In a rather strange ERISA case, a plaintiff filed suit after the ERISA plan administrator denied his claim that sought retirement benefits pursuant to a Plan titled Kroger 30-And-Out even though he was never an employee of Kroger.  The case is Beckner v. American Benefit Corp., et. al. (4th Cir. April 10, 2008).  The 4th […]

In a rather strange ERISA case, a plaintiff filed suit after the ERISA plan administrator denied his claim that sought retirement benefits pursuant to a Plan titled Kroger 30-And-Out even though he was never an employee of Kroger.  The case is Beckner v. American Benefit Corp., et. al. (4th Cir. April 10, 2008).  The 4th Circuit affirmed the denial of benefits.

Beckner filed suit under ERISA against American Benefits Corporation (ABC), Employer-Teamsters Local Nos 175 and 505 Pension Trust Fund (the Fund), and against the Trustees, contending that he was improperly denied the Plan’s monthly benefit of $2,500 or in the alternative $2,000.  Beckner conceded that he never worked as a Kroger employee, but asserted that the Plan does not provide that the Kroger 30-And-Out Benefit was only for Kroger employees.  Beckner met all the other qualifications for the benefits except that he was not an employee of Kroger. 

In 2004, ABC denied Beckner’s request for $2,500 because he was not a Kroger employee and denied his $2,000 claim because he did not meet the Plan’s $33.43 multiplier rate.  Beckner’s appeal of the decision was heard and the Trustees upheld the decision for the same reasons.  The district court also sided with the Fund’s decision to deny his claims. 

In its review of the district court decision, the Fourth Circuit found that the court properly limited its consideration to whether the Trustees abused their discretion in denying benefits.  The Fourth Circuit also found that the district court properly granted summary judgment to the Fund as to the eligibility for the Kroger 30-And-Out Benefit.  The Trustees found that one must be an employee in order to be entitled to the benefit by looking at the historic interpretation of the Plan and the common understanding of the language of the Plan.  The plan does not expressly state that it is only for Kroger employees, however, it specifically refers to “Kroger employees,” Kroger, employment and retirement several times.  The Fourth Circuit found this interpretation to be reasonable.  Therefore, not surprisingly, the Fourth Circuit found that it was within the discretion of the Trustees and the Fund to interpret the Kroger 30-And-Out Plan to allow benefits only to individuals who at some time where employees of Kroger.

Contributed by Michael K. Wilson

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