Opinion ID: 217949
Heading Depth: 2
Heading Rank: 3

Heading: The 1998 Plan Documents.

Text: Before 1997, the Plan established a formula whereby life insurance proceeds remained constant until the retiree reached the age of 66, and then decreased over a number of years until it reached 50% of the original amount (the Reduction Formula). See 5 Aplt.App. 967-68 (describing the Reduction Formula); 3 Aplt.App. 624-25 (Formula as embodied in 1998 Plan). In 1997, the Plan was amended to include a Minimum Benefits Provision. See 5 Aplt.App. 968; 3 Aplt.App. 624-25 (minimum benefits provision in the 1998 Plan Documents); Kerber, 656 F.Supp.2d at 1283. The governing documents incorporating the Minimum Benefits Provision were issued in June 1998 (the 1998 Plan Documents). The Minimum Benefits Provision is the final sentence in subsection 2.6(a) of Article II of the Plan and provides, 2.6 Benefits for Eligible Retirees. An Eligible Retiree shall commence participation in the Plan on the first day of the month coinciding with or next following the date on which such former Employee becomes eligible to receive a pension or disability benefit from the [Qwest] Pension Plan. (a) Basic Life Coverage. On the first day of the month coinciding with or next following the date upon which an Eligible Retiree attains age 66, the amount of Basic Life Coverage in effect at retirement shall be reduced annually by 10 percent until the last day of the month in which an Eligible Retiree attains age 70, at which time, such Eligible Retiree's Basic Life Coverage shall remain at 50 percent of the Basic Life Coverage amount in effect prior to his 66th birthday. Notwithstanding the foregoing, . . . such Basic Life Coverage amounts shall not be reduced below certain minimum amounts set forth in Appendix 7. . . . 3 Aplt.App. 624-25 (emphasis added). Appendix 7, in turn, establishes a minimum benefit of $20,000 for retirees who retired before January 1, 1996, and died after December 31, 1996, and a minimum benefit of $30,000 for retirees who retired after January 1, 1996. Id. at 647. The 1998 Plan Documents also contain a clause describing the company's ability to amend the Plan (the Reservation of Rights Clause or ROR). Id. at 638. The Reservation of Rights Clause is contained in Article X of the Plan and provides, Amendment. Except to the extent limited by any applicable collective bargaining agreement, the Company reserves the right, in its sole discretion, to amend the Plan at any time, in any manner, including, without limitation, the right to amend the Plan to reduce, change, eliminate, or modify the type or amount of Benefits provided to any class of Participants . . . . Any such amendment of the Plan shall be effective on such date as the Plan Sponsor may determine; provided, however, that no amendment shall reduce the benefits of any Participant with respect to a loss incurred prior to the date such amendment is adopted. Id. (emphasis added). The last line of the ROR prohibits retroactive application of amendments that reduce benefits. Id. We refer to this provision as the Prior Loss Proviso. At various times between 1998 and 2004, Qwest sent to plan participants letters confirming that they were eligible for life insurance coverage. 5 Aplt.App. 969; 4 Aplt.App. 688 (2001), 690 (2002), 693 (2003), 695 (2004). Specifically, Confirmation Statements sent between 2001 and 2004 confirmed that the plan participants were eligible for life insurance coverage. Those statements also provided, The Company intends to continue these plans indefinitely; however, it reserves the right to amend, suspend, or discontinue them at any time, except for those who retired before 1991 and where prohibited by collective bargaining agreements. 4 Aplt. App. 689 (2001), 692 (2002), 694 (2003), 696 (2004). The Confirmation Statements also indicated that the Plan Documents would govern in the event of a discrepancy between the two. Id.