Pension Fund Must Make Up Benefits Resulting From Delay In Initiation Of Monthly Payments After Retirement Date - Either By Later Payment Or By Actuarial Adjustment
CONTILLI v. LOCAL 705 INTERNATIONAL BROTHERHOOD OF TEAMSTERS PENSION FUND (March 23, 2009)
Vito Contilli reached retirement age in 1995 but continued to work for two years. He retired in October of 1997 and applied for his retirement benefits in January of 1998. Applying their rule that a retiree had to apply for benefits, the union Pension Fund began paying his monthly pension payments in February. The Fund neither paid Contilli for the interim months nor increased his monthly benefit to take those months into account. Contilli brought an action, claiming that the approach violated ERISA’s non-forfeiture rule. The district court found in favor of the Fund. Contilli appeals.
In their opinion, Chief Judge Easterbrook and Judges Ripple and Rovner vacated and remanded. The Court agreed that the retiree application requirement was not a problem – nor was a deferral of retirement without any benefit payment while the retiree is still working. Section 1053(a) requires, however, that any delay in benefits once a retirement is effective must be made up with payments for the missing months or with an actuarial adjustment to payments in future months.
