Opinion ID: 708053
Heading Depth: 2
Heading Rank: 1

Heading: The Pension Claim

Text: 13 Sharkey claims he was reinstated in July 1991 with full retroactive benefits, including continuous service and salary credit for the three-year consulting period. In support of this claim in the district court, Sharkey submitted, in addition to his own affidavit: affidavits from Bensen and another former Ultramar executive directly involved in Sharkey's reinstatement; Bensen's contemporaneous, pre-reinstatement memorandum recommending such treatment; and contemporaneous, post-reinstatement documents confirming that the recommendation had been implemented. Appellees submitted an affidavit from a former Ultramar executive stating that the reinstatement did not include retroactive benefit credit, thus raising what seems to be a factual dispute. However, appellees argue that since the Pension Committee of the Retirement Plan (Pension Committee or Committee) had discretion to interpret and administer the plan, the only issue before the district court was whether the decision of the Committee was arbitrary and capricious. Appellees contend that any reinstatement with retroactive benefits required a written plan amendment because the express terms of the plan do not allow a participant to receive retiree benefits while also accruing additional benefits. Since there was no such amendment, appellees argue that the factual dispute is immaterial. Even accepting Sharkey's assertions as true, they say, the Committee's decision was neither arbitrary nor capricious. 14 Sharkey responds that the decision in 1992 concerning his pension benefit was not made by the Pension Committee, but by executives of Lasmo, the hostile company that had taken over Ultramar in 1991. In support of this claim, Sharkey submitted to the district court the deposition of a member of the Pension Committee and a memorandum sent by the Committee to two Lasmo executives who were not members of the Committee. The memorandum included four possible benefit calculations for Sharkey and the Committee's preferred calculation. According to the deposition, the Lasmo executives did not accept the Committee's recommendation and selected a scenario providing Sharkey with a smaller pension benefit. In addition, Sharkey argues that appellees did not produce a formal Pension Committee writing evidencing a vote or decision in 1992 on the benefit due him, although there was such a writing approving the benefit he received in 1988. 15 Appellees are correct that the Retirement Plan grants the Pension Committee, the authorized fiduciary, sufficient discretion so that the arbitrary and capricious standard applies in reviewing its decisions. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 956, 103 L.Ed.2d 80 (1989); Jordan v. Retirement Committee of Rensselaer Poly. Inst., 46 F.3d 1264, 1269-71 (2d Cir.1995). Under this highly deferential standard, a decision of the Pension Committee must be upheld if reasonable. See Jordan, 46 F.3d at 1273. However, this is so only if the Pension Committee, and not some unauthorized party, made the challenged benefit determination. Rodriguez-Abreu v. Chase Manhattan Bank, N.A., 986 F.2d 580, 584 (1st Cir.1993). Where an unauthorized party makes the determination, a denial of plan benefits is reviewed under the de novo standard. Rodriguez-Abreu, 986 F.2d at 584; Baker v. Big Star Div. of The Grand Union Co., 893 F.2d 288, 291 (11th Cir.1989) (as amended Jan. 29, 1990). 16 The factual issue of who actually made the benefit determination must be resolved before a court can properly decide whether or not to uphold the pension determination. While the decision that Sharkey was not entitled to retroactive pension benefits may not have been arbitrary or capricious, 2 it is much less clear that it can withstand de novo review. Moreover, we believe that the Pension Committee bears the burden of proof on this issue since the party claiming deferential review should prove the predicate that justifies it. Cf. Scalamandre v. Oxford Health Plans (N.Y.), Inc., 823 F.Supp. 1050, 1060 (E.D.N.Y.1993). 17 We therefore reverse the grant of summary judgment on this claim and remand to the district court.