and the supporting documents that they submitted demonstrated that the pension or death benefit issue here as designed and treated as a defined pension benefit for nearly forty years it provided retirement and it was described in the plan language did but it sounds like at its discretion means it also could take it away provided that the person had not i guess died is is that i don't think respectfully your honor that's a fair reading the plan language of this plan had two different kinds benefits there were discretionary beneficiaries were not in this case and they were mandatory beneficiary so the first ifs ands discretion but then the language continues and it indicates in substance that if there is a mandatory beneficiary having the following relationship then the benefit shall be paid as follows and that's the benefits that we have an issue here and it's interesting how that fits within the structure of the plan because when the benefits were discretionary they played them wholly outside of the pension trust when they were paid a mandatory beneficiary issue that before the court they were paid from the corpus of the trust article ten point one does say that the board of directors or stella get may from time to time make changes in the plan to set forth in this document  terminate said plan but such changes still not affect the rights of any employee to any benefit to which he or she may have previously become in title here under but to become entitle to a death benefit you have to die don't you i don't think so under this plan it does not appear the intent of this and i think one thing i would ask you to think about is this and in the reason for that would be the terminations provisions your honor the terminations provisions of this plan set forth and indicated that if the plan terminated death benefits would be paid post terminations not just for those who had already died which would be what you would assume of the entitlement rows upon that but also for those who are on the pension roll at the time receiving service pensions and for those who are still employed who are eligible to retire with service that to me suggests that the entitlement arose not upon death but at the time that you render the service of the employee which trooper as an employee which then triggered your eligibility for service pension and for this related benefit and their support for this if you look at some of the language that they used to describe the plan for example eighteen thousand it's a summary plan description which is planted at sixteen goes through the criteria and then i talked about former employees and its former employees even if eligible for deferred vesting benefits are not eligible for sickness that benefit similar loosen and in summary plan description says if you are a former are not a service pension eligible you will not get this benefit post retirement if you are you will know what is the exact language that you're relying on not your characterization of it but what are the words actually say the terminations provision your honor says that if the plans are met then benefits will be  employees who are on the pension well as of the date of terminations and of employees eligible as of that date for retirement of death benefits which would have been payable from the pension fund had the plan not been so terminated so that if eligibility is tied to death you would not include those two categories of employees current employees who are eligible to retire and retirees who are already drawing service pensions you would just say with respect to deaths that occurred before the date of in risk i think very clear fairly clearly the finds it benefit in the event of death among other things as a welfare there is a welfare benefit how do you get around  well the definition of a pension plan provides some tension with that your honor the definition of a pension plan says that name think planet or five retirement income regardless of the method of the community computing benefits or the method of distribution is a pension plan the i pension plan if the employer contributions under the plan can be determined based on definitely determinable benefits that was a pretty arista regulation it's treasury reg one for one dash one the one i put it was reprisal gaited pro post benefits in the event of sickness accident disability death right isn't this like a life insurance policy a lump sum payable on the event of the death of the person involved let me address that first and then we come to that understand that the definition of welfare benefit also excludes pensions payable upon that that's one of the carve outs it's built into the definition of welfare benefits under rescind section three one and one of the structural features of the statute when it was passed one of the reforms that congress sought to enact was a requirement that every pension plan pay death benefits to spouses in the form of a joint survivor and the immediate benefit is seen to be two different kind of death benefits one is some residual money that otherwise would go to the employee has now died and the other is a lump sum like an insurance policy my understanding was it's only the latter that is disputed in this lawsuit that is correct your honor i'm just trying to address the first the point that is every death benefit of welfare but if i don't think of that could be sustained under the statute given a strong maybe not when you use death benefit is loose terminology but when we focus on the lump payable upon death that seems to be totally different then deferred compensation or regular periodic retirement payment it's not always paid as indication that it's not a type of ancillary benefit that a sponsor is free to pull out it's in fact when they when they broke up the bell system and transferred assets the actuaries concluded that funding for this death benefit had to be included in the funding you have is you have a sophisticated sponsor that knew a welfare plan when they saw it when they had welfare benefits like disability benefits they didn't pay a lot of action trust fund they didn't put them on the same fifty five hundred as the pension benefits they created separate plan numbers for them we are you're not arguing that somehow there are a stopped by treatment along the way from saying now as they do that these were welfare benefits not pension benefits by their very nature we don't raise a claim of a stop but i think when somebody when you look at the question of intent somebody treats something as a pension benefit forty years and then to suddenly say oh no it's a welfare benefit at a minimum i would think that that treatment over forty years would be relevant to the question that is true but it was a it was also on a summary judgment not on a motion to dismiss it also was involving the type of benefit for example that this sponsor clearly recognizes welfare benefits because they they put it in a welfare benefit plan when they describe the benefits and the  d they put a five hundred label on it instead of a label as they would for a pension plan they didn't report disability benefits on their fifty five hundred for the defined benefit plan so the the disability is such a clear context of a welfare benefit and it's indisputable whereas here you have something that was created prior to a recession carried forward under a recession and which was treated for forty years by everybody as a defined benefit under this defined benefit pension plan and the question is did the sponsor client should still be in this case and you have ask us to substitute your client i don't know that we've ruled on the motion to substitute your client and there's no appeal from the dismiss the brief there's no appeal from the action below or the district court refused to substitute your client case is not yet been certified as a class action do you have any procedural standing to be here before the fact of certification i'm not sure it means other than benefit there pays in the future and it's subject for a one day of the code is subject to title one of mr which means it's a benefit that has to vest it has to accrue and has to meet the minimum funding such time as the person dies that that's a missed reading of even d b plans because you could say oh someone doesn't get there they're the find benefits service pension until they retire you could add made that determination was made forty years ago because a recess appointment of plans are one side is a recess the other side is the tax code and this court has said the actual what his pension was it was it just like you and me if we're filing a tax return we have to know for filing jointly we're corporation or partnership they had to know that and they had to know it back then and all the evidence in this case shows that they b which shows how it actually funded in accrued and if you look and we argued that we showed it in the papers the schedule will be here as tables showing how the a cruel rate for the service pension though that does benefit together i'm having trouble following your logic you seem to be saying that you're implying that a defined pension benefit plan can never have and welfare benefits as well that i'm not always excluded categorically excluded i'm not saying that well if you're not saying that then the question becomes well why doesn't this plan contain both types of things it does in fact they divided up into three different plans but they put the death benefit hence a payable from pension trust the service pension and the deferred vested benefits  well welfare benefit class are not on the schedule b that the point of the matter is that that is this is a triggering event for payment under pensions and retirement if you can look at the triggering event to say what the character of the benefit is this court is that any rate that you have to look at the intended as an actual act and if you study this plan you will see that it please the court my name is john hewson i represent all of the apple leaves maybe you start with the risk of side a left left off which is she saying that this is a defined benefit plan and therefore honor it was understood that his salary benefits were ancillary you never get that work right benefits can be funded out of a pension and that is exactly what's happened here if you look at the plan itself that tells you this is the death benefit plan six sickness death benefit which there's been no contention that's a pension benefit and nor nor could there be is nothing more than that sickness death benefit continued into retirement as this court said in the unisys retiree medical benefit litigation if all you're taking is a welfare benefit during employment and continuing into retirement that doesn't turn it into a pension benefit that doesn't change it's character it continues to be a welfare benefit and that is what you have here a welfare benefit that started in employment and continues retirement if it wasn't shouted it started in flint it starts with employment is the sickness death benefit and that is a death benefit that is paid to the survivors of active employees who died during their employment from a sickness related  cause as opposed to an accidental cost seems to me that that's a different benefit than a death benefit a sickness death benefit would be a death benefit that would be paid upon death but it was it recognized that the sickness was during employment there's no sickness here but it's not actually that this this is it says in the plan itself that fisher that this is the sickness death benefit paid to retire to survivors or retirees three if the pensioner had died on his or her last day of active service for retirement on pension it's essentially saying we will have a death benefit in retirement that will be the same as a sickness death benefit was before retirement  and what about the tax treatment argument that the tax treatment argument is an enormous red herring in this case and for a couple reasons one is it wasn't properly raised a lot and for that reason you don't have a proper record on that particular issue it goes to whether or not the plan would continue to be qualified under the tax code if they had erroneous li tax treated this and that issue wasn't raised lawful what if there would have been evidence introduced that the i r s in the department of labor passed on this particular change and found no threat to qualification that evidence wasn't put in because this argument was raised below so i think in that respect should be excluded from consideration if you do decide to consider the tax treatment doesn't tell you anything more work or less than what had what was being filled out of the tax once it doesn't change the legal determination that you must make which is what is the character of this benefit and how does that fit in to the car and we noted for you for instance cases from the seventh circuit from other the fact that you might end up with a tax treatment that looks one way or the other doesn't answer your legal determination well this is i don't even think it gets to the what she said what you want but in this case out of wants to make it out to be because you have to account for how you deal with the corpus of the trust the tax authorities regardless and the tax authorities allow you to use a portion of that for an ancillary benefit so you say the tax treatment irrelevant it's irrelevant to the termination that you have to make  what drives that are determination as you understand the law you have to look at the description of the benefit in the in the plan documents the plan documents being s p d in the plan itself what is the nature and character of that benefit is that the nature and character of it out of a welfare benefit or of a pension benefit who and what does that turn on and the fact that it's lump sum i believe that the fact that it's a lump sum benefit is paid in the event of death and that characterizes welfare it doesn't fit any of the definitions of what a pension benefit is this doesn't defer income this doesn't pay retirement income i think it's a bit of a sop a street talk about the fact that there's an plan to allow it to be paid out over up to five years to call that somehow if it looks like a retirement income it's nothing more than allowing the benefit to the beneficiaries who would who would have collected it to get the most favorable tax treatment that they could in accepting the payout of this because they may have already gotten other large income receipts in the first year or two of death from the from the from the state and may wish to spread the money  thirty years of or twenty nine or however many years someone works for the company that's just in a measure that was put out there actually nine hundred sixty four as a convenience for how much should be paid it's nothing more than that and it says five is the greater of five hundred dollars or a year of salary i submit to that one hundred sixty four there are more than a few people came out better than five hundred dollars in one thousand people who retired in one nine hundred eighty five such as plaintiffs came out better in the one year's salary are there any cases in which a defined benefit plan had within it as you say this one does a separate section for a distinctly different type of benefit that fits the definition of a welfare benefit so i think i think both back and robinson and the second circuit when they have a distinctly different benefit which is the disability pension what they call the disability pension is within the pension plan that is that that is the touchstone that the plaintiffs want to go with has to be read within the entire planet as a whole which includes the reservation rights clause even has to be read within its own context which i think doesn't tell you is it tells you it shall be paid in accordance with the following grammatically it's telling you that when the benefit is paid you have to follow one of these two rules so i would go again up to what we pointed out to you which is in the in the first clause of the of the pension or death benefit section which says the committee may in its discretion authorize the shall be paid doesn't tell you anything more than it's going to be paid in accordance with one you know the rule that if it's going to be paid has to be one of these two rules depending on when you retire mr milan made the point that it is his clients or what he would refer to as mandatory beneficiaries well as you said you accept that distinction  client his clients are mandatory beneficial his his one client who would have been a mandatory beneficiary under deal old system the rest of his clients are actually the people who are going to have to die before benefits pay so they are not a beneficiary of their the triggering  looked at your pension plan and you examined all of the documentation the plan if you looked at the summary plan there were destroyed were destroyed if you had access to the i r s forms that were filed that you would conclude that you're receiving a certain amount during your lifetime and at your death your spouse or l or other eligible beneficiary was going to get this death i mean there's nothing in there other than  there's nothing that i would see in looking at that plan that draws into question at all your eligibility for the death benefit and if you're planning for your state you're going to think well this is one less lump sum i'm going to have to cover to protect my family and life insurance you know why shouldn't this be treated as a as a defined benefit that you yourselves clearly define why should that be you know it's a welfare about it you have to make that legal determine what tells us what tells us it's a welfare benefits we know it's a welfare benefit because it's a lump sum paid and because of because now you know  start let me stop you there when congress acted a recess who were they looking out for they were balancing the interests of retirees they wanted to protect and the companies who were offering benefits  work day looking for to protect the entire retirees and weren't they looking to protect the plans that were established by the companies there that was one of the important considerations that they were looking at yes your honor and they were also looking to balance what the supreme court held that they were looking of alan's the rules so that companies would continue to have incentives to offer benefits it seems to me that you're bootstrapping your argument to support your plan based on language  well it's it's money that you don't have to pay it was money that they didn't have to pay at a time in which perhaps that contribution could have pushed them into bankruptcy and put other benefits into jeopardy your honor so might not be a pocket but it certainly sounds to me like an account it's not an account your honor if there is a question on an ongoing basis as to whether or not you have to make contributions to a plan and whether or not that challenges the financial viability of a company which could challenge in ultimately other retiree benefits so that there is decisions being made that balance a number of factors your honor but the fact is is that congress when they implemented a recess at least this is what the supreme court tells us because we know it's a carefully drafted and ridiculous statute that we're all supposed to be afraid to mess with but what we've been told is that congress was valid saying the fact that it wanted to protect retirees didn't want to protect employees against the company's need to have flexibility that was sufficient to provide incentive to maintain some level of benefits they didn't want companies to go out the day after christmas passed and start terminating plans as quickly as they could because they didn't want to face the future of being locked into some benefits that would become extraordinarily expensive and that they couldn't deal with so we know that piece of it and there is a balancing that goes on so i guess i don't want you to feel that we're trying to exploit rissa there's no exploitation of risk involved here there is a welfare benefit and while there may be some subjective expectations that you describe that you believe the retirees would have those subjective expectations don't control whether or not it's a welfare or pension benefit has to be a legal determination on or has to be looking at what  the statute provides forest is how we define what's a pension and what's a welfare benefit it's not a lawyer benefit with a reservation rights clause you seem to be saying that the two categories are entirely mutually exclusive that that benefit is either a pension benefit or it's a welfare benefit and one way you know it's a welfare benefit if it is if it doesn't look like a pension benefit it's not the f or in this particular plan is not paying out a residual of what an employer would otherwise receive on this particular this particular death benefit we are talking about is like a life insurance policy that happens to be paid from corporate and from a from a they understand a lot of good the notion of fasting is language that says essentially we're not going to take this away it's not simply language describes the benefit that's a benefit description like in benefit description language doesn't  that's not the clear and expressive language we look for fasting a clear and expressive language we look for is saying that this is a benefit we're not going to change what if we were to hold that the language here is ambiguous what would be the remedy the remedy for ambiguity while you're summary judgment i know you slipped that word summary judgment in your last response or it because because it is both your honor it was originally made as a motion for summary judgment at a time at which the plaintiffs were asking to substitute in a consolidated amended complaint at adding this claim under section four twenty of the internal revenue code so the arrangement that was agreed in allowing them to put in the amended complaint i say agrees in the sense that this is what the judge decided to do not what we agreed to the summary judgment arguments with regard to all the claims that previously had been asserted you know which discovery had been conducted and summary judgment already begun and it would be a motion to dismiss as to this new claim on section four twenty which was really just a legal argument so the judge is is granting a motion to dismiss in a motion for summary judgment based on the reading of his opinion and he looked at the summary judgment materials so i think we have to read it is that he said at least six but he said the defense motion to dismiss is granted i understand that your honor and i think we have to read a little bit war practically he was looking at the most at the materials that were in and even even if you just read it literally i think that we would look at every one of you both sides but in all of that approves it would be a twelve six motion can be converted to summary judgment by consent and practice it does make a difference from our reviews as well ultimately it doesn't it's not to make a difference in this case your honor it can make a difference but since a legal question is are most important one with regard to pension versus welfare benefits it's a denial of a review anyway summary judgment is the novo review anyway the only question is would you look at materials outside the four corners of the complaint since both sides put in all their proofs and essentially consented to that being done because they understood that the nose for motion included rule fifty six is not to make a difference to your honor's as to what your scope review is for if you get to look at that entire record and decide whether or not a judge below was  correct as we would contend in granting the motion thank you very much let me start by talking about new valley very quickly new delhi is a compact case that's true that only effects the scope of what the court can look at in other words outside of the topic context the statute provides a strong integration clause the language that we're signing a new value when we talk about mandatory language when we talk about a benefit that's tied to another retirement benefit as an addition of the last thing is based on  construction of the operative plan document in this case so the fact that it was atop that plan i don't think has any bearing on that aspect of new values that look a earlier and i think that's important because that's what we're talking about we're talking about a deferral of income to be paid to beneficiaries of retirees from the corpus of a plant now there's one nuance here that we haven't talked about which is the real structure of this benefit for most people is going to be a year's salary but there was a minimum set forth in the plan of the minimum is very interesting one it's the annual amount of the pension allowance that you would receive as a service pension so there is a direct relationship as i said earlier these two benefits are joined at the hip to qualify to get this benefit you had to meet the agents or vis requirements it's a post retirement benefit that only those who met the age and service requirements for a service pension would receive and there is an i arrest reg that's covered in some of the death benefit cases that we've talked about where benefits are directly related to comes up in the cash balance context most cash balance players will provide that although it's a defined benefit plan if the employee dies they can designate that their account balance or it's actuarial equivocally be distributed often in a lot of stock so again there's a category of benefit payable on death that has historically been treated by every court has looked at it a types of benefits death benefits paid from operating and death benefits paid from the pension trust and if you look at the provisions that were relying upon that summary plan description very clear that benefits paid from the pension trust were treated as defined benefit plans that benefit paying for the pension trust we treated on as on the fifty five hundred as pension and they were on the schedule b welfare benefits are not on schedule these are not subject to  code on certain treasury regulations they are for ten or eleven and for twelve for a levon is besting integral for twelve is finding so and if you look at the definition of funding under for the four eleven ray that basically says accrued benefit is accrued benefit under the plan so if you're if the treasury provisions trump arista and it suggests to me that it does under that provision if if treasury is permitting this benefit to be a crew as a pension benefit and there is every indication that they did then if that should and fact prevail there is clearly more creativity under the code as far as the tax deductions and the treatment and i think are our brief shows that that you are permitted to fund a small death benefit as directly relate is sort of like a little mini me that attaches to your pension your pension benefit to maximise your pension the doctor eighteen to you with the best lawyers they did a beautiful job everywhere you see that the three benefits they call to be defined benefits that benefits pay from pension trust service benefits in the very best of benefits at the same treatment throughout the document same treatment and the fifty five hundred same treatment in the pension plan in the pension plans terminations prove if those were the three office and arrange to have a transcript prepared of this or argument with the cost to be split evenly thanks thanks all take the matter under advisement call the next case numbers zero six stash forty four forty eight and zero six days forty four sixty four percent or can't be seton hall university steven