UNPUBLISHED

UNITED STATES COURT OF APPEALS 

FOR THE FOURTH CIRCUIT 

No. 07-2040

DENNIS P. BRADY, 

 Plaintiff - Appellee, 

 v. 

THE DOW CHEMICAL COMPANY RETIREMENT BOARD; UNION CARBIDE 

EMPLOYEES' PENSION PLAN, formerly known as Retirement 

Program Plan for Employees of Union Carbide Corporation and 

its Participating Subsidiary Companies, 

 Defendants - Appellants. 

Appeal from the United States District Court for the Southern 

District of West Virginia, at Charleston. Robert C. Chambers, 

District Judge. (2:06-cv-00025) 

Argued: December 3, 2008 Decided: February 18, 2009 

Before NIEMEYER and MICHAEL, Circuit Judges, and Rebecca Beach 

SMITH, United States District Judge for the Eastern District of 

Virginia, sitting by designation. 

Affirmed by unpublished per curiam opinion. 

ARGUED: Robert Matthew Martin, PAUL, HASTINGS, JANOFSKY & 

WALKER, Atlanta, Georgia, for Appellants. John Francis Dascoli, 

Charleston, West Virginia, for Appellee. ON BRIEF: Erin E. 

Magee, JACKSON & KELLY, P.L.L.C., Charleston, West Virginia, for 

Appellants.
Unpublished opinions are not binding precedent in this circuit. 

2 
PER CURIAM: 

 This appeal involves a dispute about whether the Dow 

Chemical Company Retirement Board (the “Dow Retirement Board,” 

“Dow Board,” or the “Board”) and the pension plan it administers 

for employees of the Union Carbide Corporation (“UCC”) failed to 

provide plan participants adequate notice of substantial plan 

amendments pursuant to the requirements of 29 U.S.C. § 1054(h). 

Dennis Brady sued the Board and the amended plan under the 

Employee Retirement Income Security Act of 1974 (“ERISA”), 29 

U.S.C. § 1132, alleging a violation of those notice 

requirements. The district court granted summary judgment to 

Brady. We affirm. 

I. 

 Effective February 6, 2001, UCC became a wholly owned 

subsidiary of Dow Chemical Company (“Dow”). For the next two 

years the Dow Retirement Board continued to administer the 

traditional defined benefit pension plan that had been available 

to UCC employees: the Retirement Program Plan for Employees of 

Union Carbide Corporation and its Participating Subsidiary 

Companies (the “Prior UCC Plan”). As of February 7, 2003, 

however, the Board substantially amended the Prior UCC Plan and 

renamed it the Union Carbide Employees’ Pension Plan (the 

“UCEPP”). 

3 
 The changes transformed the Prior UCC Plan into a 

pension equity plan whereby benefits accrued under a different 

formula than under the Prior UCC Plan. The UCEPP also uses 

different variables in its formula than the Prior UCC Plan. 

Benefits became available under the new UCEPP formula on 

February 7, 2003, but the UCEPP also grandfathered in certain 

Prior UCC Plan benefits. The UCEPP guaranteed plan participants 

the benefits that would have been available to them under the 

Prior UCC Plan had they retired on February 6, 2003. The Board 

refers to this as the “frozen February 6, 2003 pension benefit” 

or “the February 6, 2003 grandfather benefit.” J.A. 118; 195. 

The UCEPP also provided that plan participants would continue to 

earn benefit accruals under the Prior UCC Plan through December 

31, 2005. The Board refers to this as the “December 31, 2005 

grandfather benefit.” J.A. 196. 

 The Prior UCC Plan provided both normal retirement 

benefits and early retirement benefits. Normal retirement 

benefits were payable to those age 65 or older with one month of 

service, those age 62 or later with 10 years of service, or 

those whose age plus years of service totaled 85 (the parties 

refer to these participants as having 85 “points”). Plan 

participants not yet eligible for normal retirement benefits 

were nevertheless eligible for early retirement benefits in the 

form of a percentage of their full retirement benefits. This 

4 
percentage -- or “reduction factor” -- was based on length of 

service and age and was slightly more generous for individuals 

who were forced to retire early than for individuals who retired 

early voluntarily. The applicable reduction factors appear in 

Table 1 and Table 2 of the Prior UCC Plan. Table 1 was 

applicable to those individuals who retired early voluntarily, 

and Table 2 was applicable to those individuals terminated early 

involuntarily. Table 2 incorporated a benefit that “bridged” 

individuals from 83 to 85 points. That is, those individuals 

whose age plus years of service exceeded 83 were eligible for 

full benefits under Table 2. 

 Dennis Brady was employed by UCC until July 31, 2004, 

at which time he was involuntarily terminated. At the time of 

his forced retirement, Brady’s age and years of service equaled 

83.01: he was fifty-five years and five months old and had 

worked for UCC for twenty-seven years and seven months. Brady 

sought benefits under the December 31, 2005, grandfather benefit 

of $2,642.97 per month. He argued that he was eligible for full 

retirement benefits unreduced by a reduction factor because his 

age plus years of service exceeded 83, which meant that he was 

bridged from 83 to 85 under Table 2 of the Prior UCC Plan. He 

based his argument on the materials that Dow had distributed to 

plan participants; those materials indicated that the plan 

5 
amendments extended benefit accrual under the Prior UCC Plan 

through December 31, 2005. 

 The UCEPP administrators determined that Brady was 

only entitled to $2,361.00 per month. The December 31, 2005, 

grandfather benefit was applicable as an early retirement 

benefit, but the plan amendment specified that the applicable 

reduction factors were those indicated under Table 1 of the 

Prior UCC Plan without regard to whether a participant retired 

early voluntarily or involuntarily. In short, Table 2 was 

eliminated for purposes of the December 31, 2005, grandfather 

benefit. Pursuant to Table 1 the UCEPP administrators 

determined that a reduction factor of 0.9021 was applicable to 

Brady’s benefits. Brady does not contest whether the UCEPP did 

in fact eliminate Table 2 for purposes of calculating the 

December 31, 2005, grandfather benefit. 

 Brady’s complaint concerns the adequacy of the notice 

that the Dow Retirement Board provided to prior UCC Plan 

participants when they converted to the UCEPP. The plan 

amendments triggered a statutory notice requirement known as 

“204(h) Notice.” See ERISA, Pub. L. No. 93-405, § 204(h), 88 

Stat. 829 (codified as amended at 29 U.S.C. § 1054(h) (2000)). 

The Board did provide Prior UCC Plan participants a document 

that it identified as a 204(h) Notice. But Brady argues that 

the 204(h) Notice was deficient because it failed to adequately 

6 
inform plan participants about the elimination of Table 2 from 

those benefits grandfathered into the UCEPP through December 31, 

2005. Further, Brady argues that this deficiency is an 

“egregious failure” to satisfy § 204(h). Section 204(h) 

requires notice for certain plan amendments, but it only affords 

a remedy to plan participants for an “egregious failure” to 

comply with those requirements. 29 U.S.C. § 1054(h)(6). In the 

event of such a failure, plan participants are entitled to the 

greater of those benefits available prior to the plan amendment 

and those benefits currently available under the amended plan. 

Id. § 1054(h)(6). Brady thus argues that he is entitled to the 

greater benefits he would have received under Table 2 of the 

Prior UCC Plan. 

 Brady filed his complaint in U.S. District Court under 

ERISA. See 29 U.S.C. §§ 1132, 1054. The parties stipulated 

that the UCEPP is an “employee pension benefit plan” within the 

meaning of 29 U.S.C. § 1002(2) and may be sued in its own name 

under 29 U.S.C. § 1132(d)(1). Brady’s complaint alleges that 

the Dow Retirement Board failed to provide adequate 204(h) 

Notice under ERISA (Count I) and that UCEPP administrators 

improperly calculated his benefits under a qualified domestic 

relations order (Count II). The parties filed cross-motions for 

summary judgment. The district court granted summary judgment 

to Brady on Count I, but granted summary judgment to the Dow 

7 
Board on Count II. The Board appeals the grant of summary 

judgment to Brady as to Count I. Brady does not appeal the 

summary judgment against him as to Count II. 

II. 

 The Dow Retirement Board argues that the notice it 

issued met the requirements of ERISA § 204(h). In the 

alternative, it argues that it made a reasonable, good faith 

effort to comply with the statutory requirements sufficient to 

satisfy transitional rules applicable at the time the Prior UCC 

Plan was amended. Finally, the Board argues that in no event 

did any deficiencies in its notice constitute egregious 

violations of § 204(h). 

 We review de novo a district court’s ruling on a 

motion for summary judgment. Eckelberry v. Reliastar Life Ins. 

Co., 469 F.3d 340, 343 (4th Cir. 2006). Summary judgment is 

only appropriate when the moving party demonstrates that “no 

genuine issue of material fact exists and that the moving party 

is entitled to judgment as a matter of law.” Kimmell v. Seven 

Up Bottling Co., 993 F.2d 410, 412 (4th Cir. 1993). 

III. 

 We first consider whether the 204(h) Notice issued by 

the Dow Retirement Board in this case was deficient. 

8 
Specifically, Brady alleges that the Dow Board failed to provide 

adequate notice with respect to the elimination of Table 2 for 

purposes of the December 31, 2005, grandfather benefit. Section 

204(h) requires notice of “a significant reduction in the rate 

of future benefit accrual.” 29 U.S.C. § 1054(h). A separate 

ERISA provision makes clear that “a plan amendment which 

eliminates or reduces any early retirement benefit or 

retirement-type subsidy (within the meaning of subsection 

(g)(2)(A)) shall be treated as having the effect of reducing the 

rate of future benefit accrual.” Id. § 1054(h)(9). The Board 

does not dispute that the reduction in Brady’s benefits that 

resulted from the elimination of Table 2 constituted a reduction 

in early retirement benefits or retirement-type subsidies. See

also S. Rep. No. 98-585, at 30 (1984), reprinted in 1984 

U.S.C.C.A.N. 2457, 2576 (noting that “a subsidy that continues 

after retirement” is considered a “retirement-type subsidy” 

under 29 U.S.C. § 1054(g)(2)(A) and contrasting it with 

disability benefits, death benefits, social security 

supplements, or medical benefits). 

 In determining whether the reduction in benefits in 

Brady’s case was significant, we compare the amount of the 

benefit under the plan as amended with the amount of the benefit 

under the plan prior to the amendment. See Treas. Reg. 

§ 1.411(d)-6, Q&A(7) (2003) (valid through April 9, 2003) (see

9 
68 Fed. Reg. 17,277, 17,278 (Apr. 9, 2003)); see also Davidson 

v. Canteen Corp., 957 F.2d 1404, 1407 (7th Cir. 1992). The 

parties’ stipulate that Brady would have been entitled to an 

additional $281.97 per month under Table 2 of the Prior UCC 

Plan. Thus, the applicable plan amendments resulted in a 10.7 

percent reduction in benefits for Brady. We conclude that a 

reduction of this magnitude is significant. See Davidson, 957 

F.2d at 1407 (finding reductions in annual pensions of $17,000 

and $13,000 significant); Koenig v. Intercont’l Life Corp., 880 

F. Supp. 372, 375 (E.D. Pa. 1995) (finding reductions in 

pensions between 22 percent and 32 percent significant). We 

also conclude that the Board could anticipate decreases in 

benefits of this magnitude at the time the amendment was 

adopted. See Treas. Reg. § 1.411(d)-6, at Q&A(7) (noting that 

whether an amendment provides for a significant reduction in 

benefits is determined “based on reasonable expectations taking 

into account the relevant facts and circumstances at the time 

the amendment is adopted”). 

 Because the elimination of Table 2 caused a 

significant reduction in retirement benefits, adequate notice 

was required under ERISA § 204(h). This notice must be “written 

in a manner calculated to be understood by the average plan 

participant and [must] provide sufficient information . . . to 

allow applicable individuals to understand the effect of the 

10 
plan amendment.” 29 U.S.C. § 1054(h)(2). The Board’s 204(h) 

Notice issued to Brady and other plan participants failed in one 

respect: it did not provide adequate information about the 

elimination of Table 2 for purposes of the December 31, 2005, 

grandfather benefit. 

 The 204(h) Notice included the following information 

under the heading, “Grandfathered Provisions”: 

It is important to note that when you retire on or 

after February 7, 2003, you will continue to have the 

right to elect to receive the monthly pension benefit, 

and associated eligibility dates and payment options 

you earned under the [Prior UCC Plan] through February 

6, 2003. You will not receive a monthly pension 

benefit less than what you had earned before February 

7, 2003. 

In addition, to further ease the transition to UCEPP, 

you will continue to earn benefit accruals under the 

[Prior UCC Plan] formulas through December 31, 2005. 

[Except for two modifications inapplicable to the 

current dispute that relate to how length of service 

is calculated and which indicia of earnings is used], 

[t]his benefit will serve as a minimum monthly pension 

benefit when you retire. 

J.A. 164. This provision affirmatively suggests that the 

formulas used under the Prior UCC Plan will continue to be 

available through December 31, 2005, with two explicitly 

identified modifications but no other exceptions. Indeed, the 

February 6, 2003, grandfather benefit retained Table 2, 

furthering an understanding that Table 2 is part and parcel of 

the Prior UCC Plan formulas a plan participant would expect to 

be used in a grandfathered benefit. 

11 
 The Dow Retirement Board argues that the language 

makes clear that only “benefit accruals -- not early retirement 

subsidies” -- continue through December 31, 2005. Appellant Br. 

at 17. We disagree that the Board’s use of the term “benefit 

accruals” meant that “early retirement subsidies” were excluded. 

The statutory scheme treats benefit accruals as a term of art 

that includes retirement subsidies. See Economic Growth and Tax 

Relief Reconciliation Act of 2001 (“EGTRRA”), Pub. L. 107-16 

§ 659(b), 115 Stat. 38 (codified as amended at 29 U.S.C. 

§ 1054(h)(9)) (making clear that early retirement subsidies 

should be treated as benefit accruals for purposes of ERISA 

§ 204(h)). When Dow used the term “benefits accruals,” it was 

incorporating the statutory definition. We therefore conclude 

that average plan participants would understand the 204(h) 

Notice language quoted above to grandfather into the December 

31, 2005, grandfather benefit the formulas used under the Prior 

UCC Plan, which incorporate Table 2’s reduction factors. 

 Other provisions of the 204(h) Notice further this 

understanding. The “Questions and Answers” section says, 

Q3. What will happen to the pension benefit I earned 

under the current Union Carbide Retirement Program? 

A3. You will not lose the benefit you have already 

earned under the Union Carbide Retirement Program. In 

addition, Dow has put transition credits and 

grandfathered provisions in place to help you 

transition to UCEPP. 

12 
J.A. 165. The import of this provision is to assure plan 

participants that the benefits available under the Prior UCC 

Plan, which included Table 2, would remain available under the 

UCEPP during the transition. Certainly, nothing in the 204(h) 

Notice flags the elimination of Table 2 in the December 1, 2005, 

grandfather provision. Insofar as the language of the 204(h) 

Notice is misleading about whether Table 2 is retained, it is 

inadequate under 29 U.S.C. § 1054(h)(2). See Amara v. Cigna 

Corp., 534 F. Supp. 2d 288, 339 (D. Conn. 2008) (finding that 

204(h) Notice containing affirmatively misleading statements was 

not “written in a manner calculated to be understood by the 

average plan participant”). At the very least, the 204(h) 

Notice fails to provide sufficient information from which an 

average plan participant could understand that Table 2 would not 

be available under the December 31, 2005, grandfather benefit. 

We therefore agree with the district court’s conclusion that the 

204(h) Notice issued in this case was deficient in that respect. 

IV. 

 The deficient notice raises the question of whether 

the Dow Retirement Board should nevertheless be treated as 

having complied with the requirements of § 204(h) by virtue of 

triggering a transitional good faith safe harbor that Congress 

created in its 2001 amendments to ERISA. See EGTRRA 

13 
§ 659(c)(2). Before it reached that question, the district 

court analyzed whether the Board committed an egregious failure 

to meet the requirements of § 204(h). We proceed in the same 

order of analysis for clarity of explanation. 

 Section 204(h) provides a remedy to plan participants 

in the event of an egregious failure to meet its requirements. 

29 U.S.C. § 1054(6)(A). The statute provides that 

there is an egregious failure to meet the requirements 

of [§ 204(h)] if such failure is within the control of 

the plan sponsor and is 

(i) an intentional failure (including any failure to 

promptly provide the required notice or information 

after the plan administrator discovers an 

unintentional failure to meet the requirements of this 

subsection), 

(ii) a failure to provide most of the individuals with 

most of the information they are entitled to receive 

under this subsection, or 

(iii) a failure which is determined to be egregious 

under regulations prescribed by the Secretary of the 

Treasury. 

29 U.S.C. § 1054(h)(6)(B). The district court determined that 

both subparagraphs (i) and (ii) were implicated in the present 

case, although it declined to conclude “that Defendants 

intentionally failed to mention the elimination of Table 2 in 

the first instance.” J.A. 316. The court instead concluded 

that subparagraph (i) was only implicated to the extent that the 

Board failed to provide required notice after becoming aware of 

an unintentional failure to meet the § 204(h) requirements. 

14 
 We first consider whether the district court properly 

determined that the Dow Board failed “to provide most of the 

individuals with most of the information they [were] entitled to 

receive under this subsection [§ 204(h)].” 29 U.S.C. 

§ 1054(h)(6)(B)(ii). We conclude that the evidence proffered by 

Brady in support of that determination was not sufficient. It 

is not enough that a “discernable subclass of employees” was not 

provided “adequate information.” Brady v. Dow Chem. Co. Ret. 

Bd., No. 2:06-cv-00025 (S.D. W. Va. Sept. 13, 2007). The 

statute requires a court to find that “most of the individuals” 

did not receive “most of the information they [were] entitled to 

receive.” 29 U.S.C. § 1054(h)(6)(B)(ii). Used as an adjective, 

“most” means “the greatest number of,” “the majority of,“ or 

“greatest in quantity, extent, or degree.” Webster’s Third New 

International Dictionary 1474 (2002). Thus, § 1054(h)(6)(b)(ii) 

requires a determination that at least a majority of “applicable 

individuals,” as that term is defined in § 1054(h)(8)(A), did 

not receive a large degree of information they were entitled to 

receive. 

 The correct denominator for concluding whether “most 

of the individuals” received sufficient information is the 

number of “applicable individuals” -- or those individuals whose 

rate of future benefit accrual is reasonably expected to be 

significantly reduced. 29 U.S.C. § 1054(h)(1)(requiring notice 

15 
to “each applicable individual”); id. § 1054(h)(8) (defining 

“applicable individuals” to include “each participant in the 

plan”); Treas. Reg. § 1.411(d)-6, at Q&A(9) (requiring notice 

only to those individuals whose benefits are reasonably expected 

to be significantly reduced). In the present case, the 

amendments converting the Prior UCC Plan to the UCEPP affected 

every plan participant. The record indicates that 100 percent 

failed to receive notice of the elimination of Table 2 in the 

December 31, 2005, grandfather benefit. 

 But the district court did not determine whether plan 

participants and other applicable individuals failed to receive 

a large degree of information that they were entitled to receive 

under § 204(h). A district court must in some way compare the 

magnitude of the deficiency in information to the magnitude of 

the information required under § 204(h) to find that “most of 

the individuals” did not receive “most of the information they 

[were] entitled to receive.” See 29 U.S.C. § 1054(h)(6)(B)(ii). 

Because the district court failed to make such a comparison, it 

could not conclude that there was an egregious violation under 

§ 1054(h)(6)(B)(ii). 

 We next examine whether the district court properly 

concluded that the Board “fail[ed] to promptly provide the 

required notice or information after the plan administrator 

discover[ed] an unintentional failure to meet the requirements 

16 
of this subsection [§ 204(h)].” 29 U.S.C. § 1054(h)(6)(B)(i). 

The court determined that “Defendants clearly knew that 

employees were questioning the elimination of Table 2 prior to 

Plaintiff’s involuntary separation.” J.A. 316. Undisputed 

evidence in the record makes clear that UCEPP administrators 

knew that multiple plan participants were confused about the 

status of Table 2. Dow’s pension plan leader emailed plan 

personnel to inform them that there had been “several inquiries 

by UCC employees questioning the elimination of the ‘bridging’ 

provision as it relates to the grandfathered UCC pension 

benefit.” J.A. 24. Moreover, as the court noted, Brady 

participated in a lengthy email exchange with Dow’s pension plan 

leader in which Brady described why the 204(h) Notice was 

misleading with respect to whether the December 31, 2005, 

grandfather benefit would retain Table 2’s reduction factors. 

Brady explained that the relevant language in the 204(h) Notice 

affirmatively suggested that the December 31, 2005, grandfather 

benefit would “contain both adjustment tables (a ‘voluntary’ 

table, and a ‘involuntary’ table).” J.A. 25. Based on this 

information, the district court properly concluded that the 

Board discovered its failure to provide sufficient information 

to allow average plan participants to understand that the plan 

amendment would eliminate Table 2 with respect to the December 

31, 2005, grandfather benefit. 

17 
 Moreover, the record reveals that the Dow Board failed 

to promptly rectify its deficient notice after being put on 

notice of it. The Board argues that it notified Brady “on at 

least four separate occasions that he would not receive an early 

retirement subsidy.” Appellant Br. at 22. The first such 

occasion occurred by email in October 2003. That email 

described how to calculate Brady’s February 6, 2003, benefit, 

for which Table 2 was retained. It did not explain that Table 2 

was eliminated for purposes of the December 31, 2005, 

grandfather benefit, and it was not adequate under 29 U.S.C. 

§ 1054(h)(6)(B)(i). The remaining three occasions cited by the 

Board also did not rectify the deficient notice. They occurred 

immediately prior to or after Brady retired and were a part of 

its communications denying him full retirement benefits under 

the bridging benefit of Table 2. We need not reach the question 

of what “notice or information” is minimally required under the 

statute. It is enough to conclude that the information that the 

Board relayed to Brady while denying him retirement benefits was 

not sufficient. Congress did not intend for pension plans to be 

able to satisfy the strictures of § 204(h) -- a notice 

requirement -- by communicating benefits reductions individually 

to plan participants at the time they seek and are denied ceased 

benefits. We thus agree with the district court that the Dow 

18 
Board committed an egregious violation of the 204(h) notice 

requirements under § 1054(h)(6)(B)(i). 

V. 

 We turn finally to whether the good faith safe harbor 

provision requires us to treat the Dow Retirement Board as 

meeting the requirements of § 204(h) irrespective of our 

conclusions in parts III and IV, above. Congress’s 2001 

amendments to ERISA, which made clear that 204(h) Notice was 

required for reductions in early retirement benefits and 

retirement-type subsidies (in addition to benefit accruals for 

normal retirement benefits), provided for a transitional good 

faith safe harbor. 

Until such time as the Secretary of the Treasury 

issues regulations under sections 4980F(e)(2) and (3) 

of the Internal Revenue Code of 1986, and section 

204(h) of the Employee Retirement Income Security Act 

of 1974, as added by the amendments made by this 

section, a plan shall be treated as meeting the 

requirements of such sections if it makes a good faith 

effort to comply with such requirements. 

EGTRRA § 659(c)(2). In the regulations subsequently 

promulgated, the Secretary of the Treasury similarly provided 

that for plan amendments taking effect before the September 2, 

2003, effective date of the regulations, the requirements of 

“section 204(h), as amended by EGTRRA, are treated as satisfied 

if the plan administrator makes a reasonable, good faith effort 

19 
to comply with those requirements.” 68 Fed. Reg. 17,277, 

Q&A(18) (Apr. 9, 2003)(to be codified at 26 C.F.R. pts 1, 54, 

and 602).1 The Dow Board argues that its efforts to satisfy 

§ 204(h), even if technically deficient, were reasonable, made 

in good faith, and are thus insulated under the above 

transitional safe harbor. 

 The district court concluded that except for the two 

respects in which it determined that the Board egregiously 

violated § 204(h), “it cannot be said that Defendants failed to 

make a ‘reasonable, good faith effort to comply’ with the 

statutory requirements.” J.A. 318. Our review is therefore 

limited to whether there was an unreasonable or bad faith effort 

to comply with § 204(h) as a result of the two egregious 

violations identified by the district court. It is further 

limited by our conclusion above that there was not sufficient 

evidence in the record to allow a determination that the Dow 

Board failed to provide “most of the individuals with most of 

the information they are entitled to receive.” See 29 U.S.C. 

§ 1054(h)(6)(B)(ii). Summary judgment is nevertheless 

appropriate if the Dow Board’s failure to promptly rectify its 

 1

 Because we conclude that Dow did not make a good faith 

effort to comply with the requirements of § 204(h), we need not 

decide whether the “reasonable, good faith effort” contemplated 

in the Treasury regulations is the same as a “good faith effort” 

under EGTRRA § 659(c)(2). 

20 
deficient 204(h) Notice was tantamount to an unreasonable or bad 

faith effort to comply with § 204(h)’s requirements. 

 The district court concluded that there was a failure 

to provide notice after the plan administrator discovered an 

inadvertent deficiency in the plan’s 204(h) Notice. The 

district court expressly declined to conclude that there was an 

intentional failure “in the first instance.” J.A. 316. We must 

thus determine whether the failure that did occur is sufficient 

to establish that the plan failed to “make[] a reasonable, good 

faith effort to comply with [the] requirements [of section 

204(h)].” 68 Fed. Reg. 17,277 Q & A(18). We conclude that it 

does. 

 The Board is not protected under the good faith safe 

harbor unless it acted in good faith in its efforts to comply 

with all of § 204(h)’s requirements. Those requirements include 

a continuing obligation to supplement a deficient § 204(h) 

notice. The statutory safe harbor provides that “Until such 

time [as regulations are issued interpreting IRC § 4980F and 

ERISA § 204(h)] a plan shall be treated as meeting the 

requirements of such sections if it makes a good faith effort to 

comply with such requirements.” EGTRRA § 659(c)(2). This 

language indicates that the good faith effort contemplated by 

Congress was an ongoing obligation. It is not enough to have 

21 
made a good faith effort at the outset of a plan amendment. The 

text of § 204(h) further supports this understanding: 

[T]here is an egregious failure to meet the 

requirements of this subsection [§ 204(h)] if [there 

is a] failure to promptly provide the required notice 

or information after the plan administrator discovers 

an unintentional failure to meet the requirements of 

this subsection [§ 204(h)]. 

29 U.S.C. § 1054(h)(6)(B) (emphasis added). This provision 

affirms that there is a continuing obligation to correct a 

deficient § 204(h) notice. An act constituting an egregious 

failure to meet the requirements of § 204(h) necessarily 

constitutes a violation of § 204(h).2 Congress may have been 

concerned about the ability of pension plans to satisfy the 

requirements of § 204(h) before Treasury clarified those 

requirements, but it apparently concluded that it was affording 

pension plans sufficient protection by placing any pension plan 

acting in good faith into its safe harbor. 

 We affirm the district court’s conclusion that 

irrespective of whether the Board acted in good faith when it 

 2

 We do not reach any conclusions about the applicability of 

Internal Revenue Code (IRC), 26 U.S.C. § 4980F, which imposes a 

tax on pension plans that fail to exercise reasonable diligence 

in complying with notice requirements or fail to correct 

inadequate notice within thirty days “beginning on the first 

date such person knew, or exercising reasonable diligence would 

have known, that such failure [to provide adequate notice] 

existed.” 26 U.S.C. § 4980F(c)(2). In particular, we do not 

offer an opinion on what reasonable diligence entails. 

22 
originally published its 204(h) Notice, it was no longer acting 

in good faith when it failed to promptly supplement its 204(h) 

Notice upon discovering a deficiency. The plan administrator 

received a coherent and compelling explanation that the 204(h) 

Notice was misleading with respect to whether the December 31, 

2005, grandfather benefit retained Table 2’s benefits. The 

language of the 204(h) Notice patently failed to provide 

sufficient information for an average plan participant to glean 

that Table 2’s benefits would be eliminated with respect to the 

December 31, 2005, grandfather benefit. The record also 

contains undisputed evidence that the Board knew that multiple 

employees were in fact confused about this aspect of the plan 

amendment. This evidence supports the district court’s 

determination that the Board failed to act in good faith when it 

declined to clarify its misleading (and thus deficient) 204(h) 

Notice. 

VI. 

 In sum, we hold that the district court properly 

concluded that the § 204(h) Notice the Dow Retirement Board 

provided to plan participants was deficient. Moreover, the 

deficiency amounted to an egregious failure to provide adequate 

§ 204(h) notice because the Board failed to promptly provide 

additional notice or information upon discovering the 

23 
24 

deficiency. We also conclude that summary judgment was 

appropriate notwithstanding the transitional safe harbor that 

insulates reasonable and good faith efforts to comply with 

amended § 204(h). The Board did not act reasonably and in good 

faith to satisfy its continuing obligation to supplement its 

deficient notice. Accordingly, the district court’s order 

granting summary judgment to Dennis Brady is 

 AFFIRMED.