Morrone v. Pension Fund of Local Number One, I.A.T.S.E., No. 16-723 (2d Cir. 2017)Annotate this Case
Morrone participates in a ʺdefined benefit planʺ offered by the Pension Fund. From 1970-1996, Morrone earned benefits under the Plan; in 1997, he stopped working union jobs. Under the Plan, a participant is entitled to the accrual rates ʺin effect at the time [he] ultimately separates from Covered Employment.ʺ In 1994, the Plan was amended to allow a worker who took a hiatus to bridge the gap by working five years. In 1999, the Plan removed the Five Year Rule and reinstated the Parity Rule, under which a worker with a break in Covered Employment of two or more years could bridge that gap and reactivate pension credits earned pre-hiatus by working for at least as many years after the break as the length of the break. Morrone returned to Covered Employment in 2012 and requested an estimate of the benefits he would receive should he retire in 2017. The estimate applied the Parity Rule: Pension credits that he earned pre-hiatus were assigned the 1996 rate; those earned since 2012 were valued at the current rate. Because Morrone had taken a 15‐year hiatus and would have returned to Covered Employment for only six years as of 2017, he was not entitled to the current accrual rate for his pre-hiatus pension credits. Applying the Five Year Rule would give Morrone an extra $705 per month. The Second Circuit affirmed summary judgment, in favor of the Fund, finding that the 1999 Amendment did not decrease Morroneʹs accrued benefits in violation of ERISAʹs anti‐cutback rule, 29 U.S.C. 1054(g). The higher benefit accrual rates that Morrone demands are not a ʺretirement‐type subsidyʺ but would constitute his normal retirement benefit if he satisfied the conditions to receiving them: the Parity Rule.