Unpublished Disposition, 890 F.2d 420 (9th Cir. 1985)

MEMORANDUM^* 

The Greniers appeal the district court's grant of summary judgment to the Operating Engineers Pension Trust Fund ("the Fund") denying benefits to Grenier under the Fund's pension plan ("the Plan"). We affirm.

We review de novo the district court's grant of summary judgment. Siles v. ILGWU Nat'l Retirement Fund, 783 F.2d 923, 926 (9th Cir. 1986). Summary judgment is appropriate where no genuine factual dispute exists and the moving party is entitled to judgment as a matter of law. MacDonald v. Pan Am. World Airways, Inc., 859 F.2d 742, 744 (9th Cir. 1988). We apply the same standard of review to the Fund's decision to deny benefits as did the district court: the decision will be reversed only if arbitrary, capricious, made in bad faith, not supported by substantial evidence, or wrong as a matter of law. Smith v. Retirement Fund Trust, 857 F.2d 587, 589 (9th Cir. 1988). A decision to deny benefits is not arbitrary or capricious if it is a reasonable interpretation of the Plan's language and is made in good faith. Pilon v. Retirement Plan for Salaried Employees, 861 F.2d 217, 218 (9th Cir. 1988); MacDonald, 859 F.2d at 744.

Article III, Sec. 2, of the Pension Plan provides:

An active participant may retire on a Regular Pension if he meets the following requirements: (a) he has attained the age of 62; and (b) he has at least ten years of Pension Credits; and (c) he has earned at least two quarters of Future Service Credit.

Grenier was 63 years of age at the time of his application and had two quarters of future service credit. The trustees of the Fund determined that Grenier did not have the required ten years of pension credits. Article VI, Sec. 1, provides that a participant shall be entitled to a past service credit, countable as a pension credit, for each calendar year prior to January 1, 1963 in which the participant was employed in one or more of the classifications included in the collective bargaining agreements in the geographical territory to which the collective bargaining agreements are applicable for at least eight hours. Article IV, Sec. 2, provided for future service credits to be allowed. For the periods from January 1, 1963 to January 1, 1967, the following credits were allowed:

Hours Worked in Calendar Year Pension Credit

Less than 350 hours None

350 to 699 One-quarter

700 to 1049 Two-quarters

1050 to 1399 Three-quarters

1400 and over One year

For periods from January 1, 1967 to January 1, 1985, future credits were allowed as follows:

Hours Worked in Calendar Year Pension Credit

Less than 300 hours None

300 to 599 One-quarter

600 to 899 Two-quarters

900 to 1199 Three-quarters

1200 and over One year

Grenier's claim, submitted to the trustees, showed that he commenced work for a covered employer on February 27, 1965. His application showed actual hours worked for covered employment for the years 1965 through the date of his application on October 28, 1985. This application showed credit not only for the hours worked but also for 501 hours for each of a number of years in which he maintains he was involuntarily unemployed and entitled to unemployment compensation. He contends this should be credited under the terms of the Plan. Applying the formula described in Article IV, Sec. 2, above, to the actual hours worked for all of the years involved as shown in his application, yields less than the required ten years of pension credits. This is using the application as attached to the affidavit of Grenier in his motion for summary judgment although acknowledging that the calculations of the trustees yielded somewhat less than those contended by Grenier as to the actual hours worked in covered employment.

Therefore, in order for Grenier to be eligible for retirement at age 62, as provided in Article III, Sec. 2, with its requirement for ten years of pension credits, Grenier must establish that he is entitled to the past service credit for the years prior to 1963, or that he is entitled to credit under the terms of the Plan for the times that he was involuntarily unemployed and entitled to unemployment compensation.

We first consider Grenier's entitlement to past service credit. Grenier first was employed by a contributing employer under the Pension Plan on February 27, 1965. Article IV, Sec. 4(b), provides: "Between January 1, 1963, and December 31, 1975, an Employee shall have incurred a Permanent Break in Covered Employment and his previously accumulated Pension Credit and accrued benefits cancelled if he failed to earn at least one-quarter of Future Service Credit in two consecutive Calendar Years." Grenier did not work for the required one-quarter of future service credit within the two years following January 1, 1963. He thus lost his past service credit under the terms of the Plan.

Grenier contends, however, that the Fund improperly applied the Plan's break-in-service rule against him because he had no prior notice of its terms. As the district court observed, our decision in Eddington v. CMTA-Independent Tool & Die Craftsmen Pension Trust, 794 F.2d 1383 (9th Cir. 1986), defeats Grenier's argument on this point. In Eddington we held that the pension trust could deny Eddington a pension for breaks in service despite the fact that the trust had not informed Eddington of its break-in-service rule prior to the breaks. We concluded that an employee who did not work for a contributing employer when the break-in-service rule was adopted had no right to notice from the trust. Id. at 1387-88.

Grenier's work history demonstrates that he falls squarely within Eddington 's purview. The collective bargaining agreement providing for the Fund was signed in June, 1962. Grenier's last period of work with an employer covered by the collective bargaining agreement, and therefore contributing to the Plan, ended in December, 1962. The Plan and its break-in-service rule went into effect January 1, 1963. Grenier did not return to work for a contributing employer until February 27, 1965. As these dates show, Grenier was not working for a contributing employer when the Plan became effective. The mere fact that Grenier was a member of the union and employed by an employer that had entered into the collective bargaining agreement in June of 1962, or that he was a member of the union on the effective date of the trust agreement, did not entitle him to notice. Under Eddington, Grenier had no entitlement to notice.

We next turn to the question of whether Grenier was entitled to credit during any of the years in which he maintains he was involuntarily unemployed and entitled to unemployment compensation. The affidavit of James R. McDonald, submitted by the defendant in support of the summary judgment motion, stated that Article I, Sec. 26, relating to hours of service, has remained constant and has been uniformly interpreted to exclude hours in which the participant received or was eligible to receive unemployment compensation. Article I, Sec. 26, reads in pertinent part:

The term "hour of service" after January 1, 1963, shall mean:

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(b) Each hour for which an Employee is paid or entitled to payment, directly or indirectly, by an Employer for a period of time during which no duties are performed, excluding any time compensated under a worker's compensation or unemployment compensation or disability insurance law. Such hours shall be credited to the computation period during which no duties are performed occurs. No more than 501 hours of service shall be credited under this subsection (b) in any continuous period. Two periods of non-work time shall be deemed to be continuous if they are compensated for the same reason and are not separated by at least ninety (90) days.

Grenier contends that the booklet prepared to explain to union members the Pension Plan as it had been updated through January 1, 1980, did not contain the exclusion of unemployment compensation. The Pension Fund maintains that the absence of such language from the booklet upon which the Greniers rely was the result of a clerical error and did not reflect action by the trustees to amend the Plan and therefore could not serve as a basis for recovery from the Plan. We have held that a clerical error cannot estop the Pension Fund from denying benefits, stating:

The actuarial soundness of pension funds is, absent extraordinary circumstances, too important to permit trustees to obligate the fund to pay pensions to persons not entitled to them under the express terms of the pension plan.

Aitken v. IP & GCU-Employer Retirement Fund, 604 F.2d 1261, 1267 (9th Cir. 1979), citing Phillips v. Kennedy, 542 F.2d 52, 55 n. 8 (8th Cir. 1976).

In this connection, Grenier contends that he was entitled to discovery that had been denied him by the defendants to determine whether the Plan itself had actually been amended. Mr. Grenier failed to raise this point at the appropriate time at the district court level. He did not file any motion to compel discovery or a Rule 56(f) motion and submitted the matter to the court on the basis of his response to the Fund's motion for summary judgment. We find no merit in this contention.

Furthermore, Grenier's only basis for his assertion that he received or was eligible to receive unemployment compensation for the times in question was his unsubstantiated testimony. The trustees determined that because the only support for Mr. Grenier's position that he received or was eligible to receive unemployment compensation was his unsubstantiated testimony, he had failed to carry his burden of proof on that issue. Therefore, even assuming that the Plan did not exclude crediting time for periods while Mr. Grenier was receiving unemployment compensation, or eligible to receive it, Mr. Grenier failed to establish that he had indeed received or was eligible to receive unemployment compensation. We cannot say that this determination was arbitrary or capricious.

For the reasons discussed, Grenier was not entitled to receive pension credits for his past service nor to receive pension credits for any hours in which he received unemployment compensation, or was eligible to receive that compensation. Thus, his own application shows that he does not qualify under Article III, Sec. 2, for a regular pension at age 62 because he did not have at least ten years of pension credits.

Grenier makes the additional contention that he is entitled to have his pension benefits vest despite the fact that he lacks the ten years of pension credits. This contention is based upon provisions of ERISA. He contends that 29 U.S.C. § 1053a imposes a minimum vesting requirement based solely on age, citing Duchow v. New York State Teamsters Conference Pension Retirement Fund, 691 F.2d 74 (2d Cir. 1982), cert. denied, 461 U.S. 918 (1983). The court in Duchow held that there were two distinct types of minimum vesting requirements, one of which was the attainment of "normal retirement age" despite the number of years of the employee's service. We discussed and approved this rationale in Bance v. Alaska Carpenters Retirement Plan, 829 F.2d 820, 824 (9th Cir. 1987). The ERISA definition of "normal retirement age" is found at 29 U.S.C. § 1002(24), which defines it as the earlier of--

(A) The time a plan participant attains normal retirement age under the plan, or

(B) The later of--

(i) The time a plan participant attains age 65, or

(ii) The tenth anniversary of the time a plan participant commences participation in the plan.

Article I, Sec. 22, of the Pension Plan defines "normal retirement age" as the later of (a) the time a Plan participant attains age 65, or (b) the tenth anniversary of the time a Plan participant became an active participant of the Plan. Thus, under the wording of the Plan, Grenier had not reached "normal retirement age" as he was only 63 years of age. However, Grenier contends that the Plan should really be interpreted to mean that "normal retirement age" is 62, despite the definition, arguing that a participant can, under Article III, Sec. 2, obtain his pension at age 62 with ten years of pension credits. This is different, however, from the eligibility for a vested service pension at age 65. Article III, Sec. 11, provides for the pension eligibility at age 65. This requires ten years of "vesting service." This is distinct from the ten years of pension credits required under Article III, Sec. 2. A year of "vesting service" requires that the participants have earned 1,000 hours of credit during the year. A participant could have ten years of pension credits without having ten years of vesting service, because he could have earned the pension credits over a longer period of time but without actually earning 1,000 hours of credit in each of ten years.

Article III, Sec. 13, makes the special provision required by ERISA for vesting at "normal retirement age." This is the "normal retirement age" as defined in Article I of the Plan, which is age 65. This meets the requirements of ERISA.

Grenier makes other contentions concerning breaks in service after 1965, and notice requirements with regard to those breaks. We find it unnecessary to reach these contentions because Grenier does not qualify for a pension regardless of whether the trustees' interpretation of the break-in-service requirements in those years was arbitrary or capricious or whether improper notice concerning those break-in-service requirements was met.

The judgment of the district court is affirmed.

AFFIRMED.