Appeals from three final judgments entered in the United States District Court for the Eastern District of New York, Jack B. Weinstein, Judge, awarding plaintiffs past and future pension benefits despite their inability to satisfy certain eligibility rules as amended in 1966 and 1971. All judgments affirmed in part, vacated and remanded in part.
Before Mulligan, Van Graafeiland and Kearse, Circuit Judges.
The Joint Plumbing Industry Board, Local Union No. 2 of the United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry, and the individual defendants appeal from three judgments entered in the United States District Court for the Eastern District of New York (Jack B. Weinstein, Judge ), ordering payment of past and future pension benefits to plaintiffs Peter Valle, Hilda Friedlander (as Executrix) and Louis Krupka. These unconsolidated appeals, along with three others, were argued together in this Court*fn1 and raise the question whether certain amendments to rules of eligibility for pension benefits adopted by the defendants, imposing a requirement that a participant have worked fifteen consecutive years for contributing employers immediately prior to his application for benefits, were arbitrary and capricious as applied to Valle, Krupka, and plaintiff Hilda Friedlander's deceased husband Arthur Friedlander ("Friedlander").*fn2 The defendants contest the district court's determination that plaintiffs are entitled to pension benefits and, in addition, allege various errors in the computation of benefits.
For the reasons set forth below, we find that the plaintiffs are entitled to pension benefits and we affirm so much of each judgment as awarded past and future pension benefits; we vacate so much of each judgment as awarded interest from the date of application for benefits, and remand for clarification or further consideration; and we vacate so much of the judgment in favor of Mrs. Friedlander as awarded death benefits and remand for further consideration.
A. The Pension Plan and Its Amendments
Local 2 of the United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry (the "Union") was formed in 1938. In 1950, the Union and the Association of Contracting Plumbers of the City of New York entered into a collective bargaining agreement which provided for the establishment of a pension fund. The Plumbing Industry Pension Fund (the "Fund") and the Plumbing Industry Board (the "Board") were formally created in 1952 by Agreement and Declaration of Trust. The Fund was created for the benefit of employees under the authority of § 302 of the Labor Management Relations Act, 29 U.S.C. § 186(c)(5) (1976), and was to be funded by employer contributions and administered by an equal number of Union and employer-designated trustees. The trustees were authorized to make, amend or repeal such rules and regulations of the Plumbing Industry Board Pension Plan (the "Plan") as they deemed necessary to carry out the provisions of the Trust Agreement.
The initial eligibility requirements, promulgated in 1952, were as follows:
(A) attainment of 65 years of age;
(B) membership in good standing of the Union for at least 15 years;
(C) membership in good standing of the Union for at least 5 consecutive years immediately preceding application for benefits;
(D) employment by a contributing employer in each of the 2 years immediately preceding the application (or employment as a salaried Union officer for that period), provided, however, that the 2-year requirement could be waived because of illness or disability;
(E) at least 1250 working days of employment at the plumbing trade during membership in the Union.
The amount of the monthly pension under the 1952 plan was set at $1 for each year, to a maximum of 30, of Union membership.
The eligibility requirements were set out in a booklet distributed to Union members during the early 1960's. The booklet also stated that for purposes of satisfying the 1250-day requirement of section (E) applicants would be given credit for employment by a plumbing contractor prior to establishment of the benefit plan.
Thereafter the eligibility requirements of the Plan were amended on several occasions. In 1963, the rules were amended to make eligibility independent of membership in the Union. Conditions (B) and (C) of the Plan, which had required 15 years' Union membership with 5 consecutive years immediately preceding application, were deleted.*fn3 Subsection (E) was revised to require that the 1250 days of employment in the plumbing trade occur during the period of contributory employment rather than during membership in the Union. Despite the deletion of the Union membership requirement for eligibility, the level of benefits to which a participant was entitled continued to depend on how many years he had been a Union member.
The rules of eligibility were amended again in 1966. Conditions (D) and (E) were replaced by the requirement that the applicant have been a participant in the Plan for at least 15 consecutive years immediately prior to application, during which period employer contributions for the applicant must have been made to the Fund for at least 1250 days. Regular retirement age remained at 65, but a provision was introduced for early retirement at age 60. The level of benefits upon regular retirement continued to be dependent on the length of Union membership.
In 1968 the age for regular retirement was lowered from 65 to 64. And in 1969 the age was further lowered from 64 to 62.
In 1971, the rules were amended again. An alternative to the 1966 amendment's 15-year requirement was introduced: an applicant would be eligible for a pension if he had a total of 15 years "unbroken benefit service." "Benefit service" was defined to include various periods of service for contributing employers,*fn4 and a break was deemed to have occurred if, in any period of three consecutive calendar years, the applicant did not work at least 70 days in one year or 35 days in each of two years. The 1971 amendments also changed the method of calculation of benefits for those who took regular retirement, linking the level of benefits to years of service for contributing employers rather than years of membership in the Union.
Although defendants assert that these amendments were the subject of discussions at Union meetings from time to time, no contemporaneous notice of any of the amendments was given to Union members or other participants in the Plan. The booklet distributed to Union members in the ...