The opinion of the court was delivered by: BRIEANT
By motion docketed July 3, 1979 and fully submitted for decision on July 24, 1979, defendant seeks an order dismissing the complaint pursuant to Rule 12(b) (1) or (6), F.R.Civ.P. on the grounds that (1) the Court lacks subject matter jurisdiction; or (2) the complaint fails to state a claim upon which relief can be granted. Both parties having filed supplementary affidavits which this Court has taken into consideration, the motion shall be treated as seeking summary judgment and disposed of in accordance with Rule 56, F.R.Civ.P.
The complaint, filed June 6, 1979, alleged violations of § 203(a)(2)(B), 29 U.S.C. §§ 1053(a), (2)(B) and 403(c)(1), 29 U.S.C. § 1103(c)(1) of the Employee Retirement Income Security Act of 1974 ("ERISA") arising out of the reduction by defendant employer of the agreed severance pay due and owing plaintiff employee by the amount of the present value of the accrued vested interest of plaintiff in his pension entitlement.
Subject matter jurisdiction is founded upon § 502 of ERISA, 29 U.S.C. § 1132, authorizing a civil action by a participant of an "employee pension benefit plan" or "pension plan" to obtain appropriate relief for violations of the Act.
The relevant facts are not in dispute. Plaintiff Robert Spitzler had been an employee of defendant, New York Post Corporation (the publisher of the New York Post, which was sold to other interests. Defendant is now known as News Group Publications, Inc.) On May 4, 1978, at the age of 47, and after approximately 17 years of service, he was involuntarily terminated by the defendant. Plaintiff then held the position of Assistant Managing Editor, and under the terms of the written plan of New York Post Corporation for Severance Pay and Vacation Pay for Executive Personnel ("Severance Agreement"), would have been entitled to severance pay upon such termination in the amount of $ 55,000.00. Paragraph 2(c) of the Severance Agreement, however, states that "(c) The employee shall be entitled to receive only that amount by which the severance benefit . . . exceeds the actuarial value of his accrued vested benefit under the Pension Plan."
Plaintiff, by virtue of his participation in The New York Post Corporation Employees' Pension and Retirement Plan ("Pension Plan"), had an accrued vested interest in his pension entitlement the actuarial value of which amounted to $ 26,112.00. Defendant deducted this amount from the $ 55,000.00 severance payment pursuant to P 2(c) of the Severance Agreement and paid plaintiff $ 28,888.00 as severance pay.
Plaintiff alleges that the reduction in his severance pay, in effect, constituted (1) a forfeiture of his vested pension benefit in violation of § 203(a) of ERISA, 29 U.S.C. § 1053(a); and (2) a diversion of plaintiff's vested pension benefit owed by the defendant in violation of § 403(c)(1) of ERISA, 29 U.S.C. § 1103(c)(1), to the extent that the present value of that pension benefit was used to reduce the severance pay obligation of the defendant to the plaintiff.
These allegations are sufficient to sustain this Court's subject matter jurisdiction under § 502 of ERISA, 29 U.S.C. § 1132, despite the fact that there may be a failure to state a claim upon which relief can be granted. Bell v. Hood, 327 U.S. 678, 682, 66 S. Ct. 773, 90 L. Ed. 939 (1945). So much of the defendant's motion as seeks a dismissal for want of subject matter jurisdiction is denied.
In considering whether plaintiff states a claim, it is necessary to consider the purposes and language of ERISA. ERISA was enacted to regulate employee pension plans. A stated concern of Congress was that "many employees with long years of employment are losing anticipated retirement benefits owing to lack of vesting provisions in such plans." § 2(a) of ERISA, 29 U.S.C. § 1001(a). Meeting this problem, § 203 of ERISA, 29 U.S.C. § 1053, in pertinent part, provides minimum vesting standards as follows:
"(a) Each pension plan shall provide that an employee's right to his normal retirement benefit is nonforfeitable upon the attainment of normal retirement age and in addition shall satisfy the requirements of paragraphs (1) and (2) of this subsection.
(1) A plan satisfies the requirement of this paragraph if an employee's rights in his accrued benefit derived from his own contributions are nonforfeitable.
(2) A plan satisfies the requirements of this paragraph if it satisfies the requirements of subparagraph (A), (B), or (C).
(A) A plan satisfies the requirements of this subparagraph if an employee who has at least 10 years of service has a nonforfeitable right to 100 percent of his accrued benefit derived from employer contributions."
The term "nonforfeitable" is defined in § 3 of ERISA, 29 U.S.C. § 1002 as: "(19) . . . a claim obtained by a participant or his beneficiary to that part of an immediate or deferred benefit under a pension plan which arises from the participant's service, which is unconditional, and which is legally enforceable against the plan. . . ."
The Pension Plan of the defendant complies with the vesting requirements of ERISA. In addition, ...