Opinion ID: 1427141
Heading Depth: 3
Heading Rank: 2

Heading: Restitution for Past Low Pension Benefit Payments

Text: Having determined that it was permissible for the District Court to order DuPont to pay a higher pension benefit going forward, we must examine whether the Court correctly declined to order DuPont to pay restitution for the unduly low payments Pell had already received. Because the pension funds are held in trust by DuPont and thus are specifically identifiable property, the District Court erred when it determined that restitution was not available. [A] plaintiff [may] seek restitution in equity, ordinarily in the form of a constructive trust or an equitable lien, where money or property identified as belonging in good conscience to the plaintiff [can] clearly be traced to particular funds or property in the defendant's possession. Great-West, 534 U.S. at 213, 122 S.Ct. 708. The difference between the pension payments Pell actually received and the payments he should have received belongs, in good conscience, to him. Therefore, Pell can receive restitutionary payments for the difference if the funds can clearly be traced to particular funds in DuPont's possession. Id. ERISA says: Except as provided..., all assets of an employee benefit plan shall be held in trust by one or more trustees. 29 U.S.C. § 1103(a). Therefore, ERISA plan funds are, as a matter of law, held in trust and are not available to the employer for general use. Our case law, both before and after Great-West, treats employee benefit plan funds as trust funds. We have noted that ERISA requir[es] the application of traditional trust law in the administration of the statute. Coar v. Kazimir, 990 F.2d 1413, 1422 (3d Cir.1993) (citing Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 110, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989)). We applied trust law principles in Skretvedt, a case where a DuPont employee had previously litigated, and won, the right to disability benefits. 372 F.3d at 198. Skretvedt moved for an award of interest on the wrongfully withheld benefits. Id. at 199. We concluded that Skretvedt could be entitled to interest under a restitutionary theory and remanded for further proceedings. [8] Id. at 215. We determined that such an award would not make DuPont `personally liable' for `interest'... in violation of Great-West [, because].... Skretvedt's cause of action under § [1132](a)(3)(B) is against the relevant ERISA plans whereby he seeks restitution by way of a constructive trust over the actual funds wrongfully earned by those plans. Id. at 214. We also determined that the funds in question could be clearly traced: [T]o find the funds Skretvedt alleges belong to him ..., we need look no further than the ERISA plans that withheld Skretvedt's benefits for several years and profited with respect to the withholding of those benefits.... Skretvedt has sufficiently identified specific funds traceable to the defendant ERISA plans that belong in good conscience to him. Id. We added in a footnote: [A]s several circuit courts have noted, the Senate Finance Committee, in its report on ERISA, specifically contemplated that `appropriate equitable relief' under § [1132](a)(3)(B) would include, `[f]or example, ... a constructive trust [to] be imposed on the plan assets....' Id. at 214 n. 28 (citations omitted). The ruling in Skretvedt did not violate Great-West, nor would a ruling that Pell is entitled to restitution for his unduly low prior pension payments. [9] During Pell's employment, DuPont made contributions to its pension fund to cover the aggregate future pensions of its current employees. The amounts of these contributions were calculated through a formula that specifically took Pell into account. Therefore, the restitution Pell seeks for his unduly low past pension payments is clearly traceable to the plan trust funds in DuPont's possession. The District Court made an error of law when it assumed that it could not order DuPont to pay Pell for the difference between the benefit amounts he received and the amounts he should have received. [10] Under Skretvedt, it is appropriate to impose a constructive trust on the DuPont plan funds to obtain restitution for the portions of the past pension payments that were wrongfully withheld from Pell. 372 F.3d at 214.