## United States Court of Appeals FOR THE EIGHTH CIRCUIT

_____________ No. 97-2817MN

_____________ Mary Ellen Marolt, * * Appellee, *

* v. * * Appeal from the United States Alliant Techsystems, Inc.; Alliant * District Court for the District Techsystems Pension and Retirement * of Minnesota. Administrative Committee; Mellon * Bank, N.A., * * Appellants. *

_____________ Submitted: May 13, 1998

Filed: July 13, 1998

_____________ Before RICHARD S. ARNOLD, JOHN R. GIBSON, and FAGG, Circuit Judges.

_____________ FAGG, Circuit Judge.

Alli ant Techsystems, Inc. (Alliant Tech), the Alliant Techsystems Pension an d Retir ement

Administrative Committee (PRAC), and Mellon Bank, N.A. (collectivel y Alliant ) appeal the district court’s order granting summary judgment for Mary Elle n Marolt, a nd denying Alliant’s cross-motion for summary judgment, in this Employe e Retirement Income Security Act (ERISA) lawsuit. We agree with the district court that-2-

the PRAC abused its discretion in rejecting Marolt’s appeal concerning her retirement benefits, and we thus affirm.

The pertinent facts are undisputed. Marolt worked at Honeywell from 1980 to 1989. In September 1990 Honeyw ell spun off several divisions to create Alliant Tech, a subsidiary o f Honeywell. In November 1990 Marolt took a temporary position with Alliant Tech. The following March, Marolt’s supervisor offered Marolt a permanen t position. The supervisor told Marolt she believed Marolt was entitled to “bridge” her break in service--that is, to date her em ployment with Alliant Tech from the start of her employment

at Honeywell, which would increase Marolt’s retirement benefits. After Maro lt’s supervisor discussed the matter with Alliant Tech’s human resource s department, she assured Marolt the break would be bridged, and Marolt accepted the permanent position. Marolt then formall y applied for bridging to her Location Benefits Admin istrator (LBA), who approved the application in December 1991. Alliant Tech confirmed Marolt’s bridging status several more times, both orally and in writing. In June 1994, however, Marolt’s LBA informed Marolt she was not entitled to bridging after all because sh e had not been employed with Honeywell on the date of the Alliant Tech spin off. The PRAC denied Marolt’s appeal of this decision without furthe r expl anation, saying only that it “recognize[d] that errors had been made i n communicating credited service[] dates, but the correction to you was communicate d prope rly. As a result, your request to bridge your credited service is denied.” Marolt then brought this lawsuit under 29 U.S. C. § 1132(a)(1)(B) to clarify her rights to future benefits.
Alliant Tech’s Summary Plan De scription (SPD) contains the following relevant provisions:

If you l eave Alliant Techsystems and later return, you have a break i n service

. Y ou may be eligible to receive credit for your prior service , through a process called bridging , when you return to work.-3-

It is yourresponsibility to initiate bridging of a break in service b y contacting your Location Benefits Administrator (LBA).

. . . If you left Alliant Techsystems (Honeywell) on or after February 1 , 1976: Your service before the break will be counted if: You were vested and had at least five years of credited service when your employment ended; or You were not vested and were away from the company for less than five years; or The length of time you wer e away from the company was less than your credited service at the time you left; or Your total periods of credited service equal 20 years or more. . . .
Notes : 1) Generally, credited service with Honeywell Inc. prior to ou r 9/28/90 spinoff is included in credited service with Alliant Techsystems.

. . . 4) Temporary service prior to January 1, 1990, may count towar d credited service. Your Location Benefits Administrator can provid e details if needed. It is undisputed that Marolt was v ested under Honeywell’s retirement plan, that Marolt had more than five years of credited service at Honeywell, and that Marolt lef t Honeywell after February 1, 1976. Th us, according to the SPD her “service before the break will be counted.”
Alliant Tech’s formal retirement plan document also addresses th e bridging issue, although it takes some digging to understand how. Section 1.1.12(a) of the formal plan pr ovides that “[s]ervice with Honeywell Inc. shall be considered service with [Alliant Tech] t o the extent described in Section 1.5.” Section 1.5 states that “service wit h Hone ywell Inc. shall be considered service with [Alliant Tech] for purposes o f determining Credited Service under Section 1.1.12 to the extent . . . such-4-

crediting is required under the Distribution Agreement . . . .” Section 1.5 does not refer the reader to any particular part of the Distribution Agreement, a 115-page document governin g the Alliant Tech spin off. Nevertheless, on page seventy-four of tha t do cument, subsection 8.03(d)(i) gives credit for service at Honeywell to “Transferred Employees,” and on p ages thirteen and fourteen “Transferred Employee” is defined to include only those persons who were employed at Honeywell on the date o f the spin off. Marolt was not employed with Honeywell on that date. The district court concluded, however, th at the Distribution Agreement is not part of Alliant Tech’s ERISA plan

. With the Distri bution Agreement out of the picture, the district court held the PRAC’s decis ionwas unreasonable because the SPD expressly provides for bridging in case s like Marolt’s.

We review de novo the district court’s grant of summary judgment for Marolt , apply ing the familiar standard set forth in Federal Rule of Civil Procedure 56(c), an d viewing the factual record in the light most favorable to the losing party, Alliant. See Barke r v. Ceridian Corp. , 122 F.3d 628, 632 (8th Cir. 1997). Because Alliant Tech’s ERIS Aplan gives the PRAC discretionary authority to interpret and apply the plan’ s provisions, the district court reviewed the PRAC’s decision for ab use of discretion. See Firestone Tir e & Rubber Co. v. Bruch , 489 U.S. 101, 115 (1989); Donaho v. FM C Corp. , 74 F.3d 894, 898 (8th Cir. 1996). Under this standard of review, the PRAC’s decisi on stands unless it was “without reason, unsupported by substantial evidence or
erroneous as a matter of law.” Donaho , 74 F.3d at 900 (internal quotations omitted). “We review de novo a district court’s application of the defere ntial standard of review.” Id. at 898.

Alliant di sagrees with the district court’s analysis. First, contrary to the district court’s r ejection of the Distribution Agreement, Alliant maintains the formal pla n document incorporates the Agreement, and under the Agreement’s relevant provisions Marolt is disqualified from bridging. Second, cont rary to the district court’s conclusion that the SPD expressly entitles Marolt to bridging, Alliant contends the SPD is silent-5-

about bridging rights in Marolt’s particular circumstance s--those of a former Honeywell empl oyee who was not employed with Honeywell on the date of the spin off. Se e Jensen v. SIPCO, Inc. , 38 F.3d 945, 952 (8th Cir. 1994) (observing that although “an SPD provision prevails if it conflicts with a provision of a plan,” that rule “does no t apply when the plan document is specific and the SPD is silent on a particular matter”). Emp hasizing the word “[g]enerally” in note one to the SPD’s bridging provisions , Alliant interprets t

hose provisions as general rules only. According to Alliant, another part of the SPD directs plan participants like Marolt to th e formal plan document for the specifics on bridging: “This SPD is not meant to cover every detail of the plan

. Complete details are in the plan document . . . .” Third, Alliant argues that the SP D itself makes bridging available only to employees who “leave . . . and later return. ” Alliant interprets this phrase to mean that only those employees who left Honeywell and came back to Honeywell, or who left Alliant Tech and came back to Alliant Tech, are entitled to bridge. Under this interpretation of the S PD, employees like Marolt who left Honeywell and came back to Alliant Tech did not “leave . . . and later return,” so the SPD itself disqualifies persons in Marolt’s circumstances from bridging.

Alliant does not explain how the SPD can both address Marolt’s particula r situation and remain silent about it at the same time. Also, Alliant’s viewthat the SPD’s general re ference to the formal plan--“[c]omplete details are in the plan document”-

- requires employees to consult the formal document for details about bridging renders meaningless the SPD’s specific direc tion to consult with and rely on the LBA for those details, as Marolt did. If Alliant’s hindsight interpretation of the SPD were th e interpr etation the PRAC formulated and applied when it decided Marolt’s case, w e
wou ld have to consider whether these inconsistencies make Alliant’s interpretatio n unreasonable. See Finley v. Special Agents Mut. Benefit Ass’n, Inc. , 957 F .2d 617, 621 (8th Cir. 1992).
The fact is, th e PRAC did not provide a rationale for its decision. The PRAC’s failure in this regard was contrary to the ERISA statute, federal regulations, and this-6-

court’s longstanding precedent. See 29 U.S.C. § 1133(1) (1994); 29 C.F.R. § 2560.503-1( h)(3) (1997); Richardson v. Central States, Southeast & Southwest Areas Pension Fund , 645 F.2d 660, 664, 665 (8th Cir. 1981). We will not permit ERIS A
c l aimants denied the timely and specific explanation to which the law entitles them to be sandbag ged by after-the-fact plan interpretations devised for purposes of litigation. The record shows Marolt’s LBA took away Marolt’s bridging bas ed on the Distribution Agreem ent. Because the PRAC affirmed the LBA without giving a differen t explana tion, we conclude the PRAC also based its decision on the Distributio n Agreement. Contrary to Alliant’s contention t hat “the PRAC implicitly and necessarily interpreted” the SPD, the record shows no such thing, let alone that in deciding Marolt’s appeal the PRAC construed particular words and phrases in the SPD as Alliant no w does. It is the PRAC’s interpretation to whic h we must defer if reasonable; we are free to ignore ERISA plan interpretations that did not actually furnish the basis for a pla n admi nistrator’s benefits decision. See Brumm v. Bert Bell NFL Retirement Plan , 995 F.2d 1433, 1437 (8th Cir. 1993).

We have our doubts whether the plan document’s reference to the Distribution Agreement sufficed to incorporate the Agreement’s relevant provisions in the forma l plan. See Rinard v. Eastern Co. , 978 F.2d 265, 269 n.3 (6th Cir. 1992) (requiring , among other cr iteria, that the “terms of the incorporated document . . . be known o r easily available to the contracti ng parties”). Because the record does not establish that the Distribution Agreement was unavailable to Marolt, however, we will assume th e provisions of th e Agreement involved here are part of Alliant Tech’s formal plan. We may, of cour se, affirm the district court on any ground supported by the record. Se e Hall v. LHACO, Inc. , 140 F.3d 1190, 1193-94 (8th Cir. 19 98). Although the SPD does not mention the transferred em ployee restriction, we reject Alliant’s view that the SPD is sil ent on the “particular matter” at issue here, Jensen , 38 F.3d at 952, which i s bridging. On that subject, the SPD recites a number of criteria that clearly an d unambiguously entitle Marolt to bridge her break in service. Those are binding. See id. Just as clearly, the Distribution Agreement rules out bridging for Marolt. When-7-

summary plan description provisions confl ict with formal plan provisions, the summary plan provisions prevail as a matter of law. See Barker , 122 F.3d at 633; Jensen , 38 F.3d at 952. Thus, it was an abuse of discretion for the PRAC to reject Marolt’s bridgin g reque stbased on Distribution Agreement provisions incorporated in the formal plan

. See Donaho , 74 F.3d at 900 (plan administrator abuses discretion when its decision is legally erroneous). This case well illustrates the reason for the Barker and Jensen rule. A plan doc ument required by law to be plainspoken for the benefit of “average pla n participant [s],” 29 U.S.C. § 1022(a)(1) (1994), and furnished to participants, see id. § 1024(b)(1) , says one thing, and an obscure passage in a transactional document onl y lawyers will read and understand says something else. The accessible provision s govern be cause “[a]dequate disclosure to employees is one of ERISA’s majo r purposes.” Barker , 122 F.3d at 633.

Alliant contends Marolt mu st prove she relied on the SPD to her detriment. We disa gree. We have indeed held that “to secure relief on the basis of a faulty summary plan desc ription, the claimant must show some significant reliance on, or possibl e prejudice flowing from the summary,” Maxa v. John Alden Life Ins. Co. , 972 F.2d 980, 984 (8th Ci r. 1992) (alteration and internal quotations omitted), but Marolt does no t contend Allia nt Tech’s SPD is faulty. A faulty summary plan description is one tha t fail s to meet “the requirements of ERISA and its attendant regulations.” Id. Marol t says in her brief the SPD “meets the requirements of ERISA.” Relying on Anderso n
v. Alpha Portland Indus., Inc. , 836 F.2d 1512, 1520 (8th Cir. 1988), however, Alliant argues that by claiming the SPD and the formal plan conflict, Marolt necessaril y contends the SPD is faulty. Although one or two sentences lifted out of context appear to support Alliant’s argument, Anderson does not so hold.

At issue in Anderson

was whether the parties to a collective bargaining agre ement (CBA) that included a we lfare plan intended benefits under the plan to terminate when the CBA expired. See id. at 1513. Contending the parties intended to confer veste d lifetime benefits, see id. , the claimants in Anderson pointed to a provision-8-

of their SPD, which read: “Coverage will continue for the remainder of your life. ” Because substantial contrary evidence drawn from the CBA showed no intent to vest benefits, t he district court ruled against the claimants despite the SPD’s language, and we affirmed. See id. at

1519. The claimants also argued they were entitled to recover under pr ovisions of ERISA that require SPDs to “apprise . . . participants an d beneficiaries of their rights and obligations under the plan” and to disclos e “circ umstances which may result in disqualification, ineligibility, or denial or loss o f benefits,” 29 U.S.C. §§ 1022(a)(1), (b). See Anderson , 836 F.2d at 1519-20. At the same time, the claimants maintained they did no t have to show they relied on their SPD because t hey did not consider the SPD “faulty.” We rejected this self-contradictor y argument. See id. at 1520. Anderson stands for the unremarkable proposition that an ERIS Aplaintiff who claims a summary plan description violates 29 U.S.C. § 102 2 necessarily contends the summary description is faulty. Marolt makes no such claim.

We affirm the district court.
A true copy.

Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.