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NOSTRAME v. CONSOLIDATED EDISON CO. OF NEW YORK

December 19, 1980

Frank J. NOSTRAME, Plaintiff,
v.
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC., Defendant



The opinion of the court was delivered by: HAIGHT

MEMORANDUM OPINION AND ORDER

Plaintiff seeks a declaratory judgment that defendant, his former employer, is in violation of the Employees Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq., and that plaintiff retains rights in a pension plan adopted by defendant according to the provisions of ERISA. Jurisdiction is based on 29 U.S.C. § 1132. Both sides move pursuant to F.R.Civ.P. 56 for summary judgment. For the reasons stated, plaintiff's motion is denied and defendant's cross-motion is granted.

I.

 The material factual issues are not in dispute.

 Plaintiff Frank J. Nostrame commenced employment with defendant Consolidated Edison Co. of New York, Inc. ("Con Ed"), a public utility, on June 1, 1964. Plaintiff voluntarily resigned from Con Ed, where he then worked as an attorney in defendant's legal department, on February 28, 1975. He was thirty-seven years of age and had completed ten years and nine months of continuous service.

 At the time plaintiff resigned, Con Ed had in existence its Pension Plan for Retirement for Age ("Retirement Plan"), effective July 1, 1953, as amended April 1, 1973. Under the Retirement Plan, an employee could elect to retire at any one of three times: at age 45 or over, the early optional retirement age, provided that his years of service at Con Ed when added to his age totaled 75; at age 62, the stated retirement age; and at age 65, the mandatory retirement age. *fn1" Eligibility for pension benefits upon retirement was determined under the following formula set forth in Section III of the Retirement Plan:

 
"(A) Pensions (1) Every employee who shall have attained or passed stated retirement age and whose years of accredited service shall be ten (10) years or more and which when added to his years of age shall total not less than seventy-five (75) shall be granted a gross pension ..."

 An employee qualifying for early optional retirement was also granted a pension in accordance with the above formula, subject, however, to a discount factor. *fn2" Plaintiff concededly does not qualify for a pension under these provisions. He had neither attained the age of 45 required for early retirement nor did his years of service, approximately ten, when added to his age at retirement, 37, equal the total 75 required to collect benefits under the Retirement Plan.

 The Retirement Plan, however, did not conform to the provisions of ERISA in that, inter alia, it did not provide for vesting of pension rights in employees with more than ten years of service. ERISA requires that:

 
"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." 29 U.S.C. § 1053(a).

 Under paragraph 1, an employee's rights in benefits derived from his own contributions must be nonforfeitable. Under paragraph 2, an employer is given the option of electing one of three types of vesting plans under which a participant obtains a nonforfeitable right to a certain percentage of his accrued benefits derived from employer contributions. To satisfy these requirements, defendant adopted the Consolidated Edison Pension and Benefits Plan ("the ERISA Plan"). Pursuant to 29 U.S.C. § 1053(a)(2)(A), section 6(A) of the ERISA Plan states that "(a) participant who completes ten (10) or more years of vesting service will be entitled to a nonforfeitable right of one hundred percent (100%) of his accrued pension payable from age sixty-five (65)."

 The ERISA Plan was effective August 1, 1975, some five months after plaintiff resigned from Con Ed. Defendant elected to adopt the ERISA Plan earlier than January 1, 1976, the date required by ERISA, *fn3" in order to comply with an agreement entered into with the union representing its employees; that agreement was reached some time after plaintiff resigned from Con Ed. Notification and a summary of the ERISA Plan were given to Con Ed employees on August 11, 1975; qualification of the ERISA Plan by the Internal Revenue Service was obtained in February of 1976.

 Plaintiff states that at the time he tendered his resignation, he was aware of the general provisions of ERISA. He also knew of the particular ERISA requirement that pension rights must vest in employees with a minimum of ten years of service. Affidavit of Frank J. Nostrame, sworn to Aug. 1, 1979, at P 4. However, plaintiff avers that he was unaware Con Ed planned to adopt or was in the process of adopting a new pension plan; "(t)his was not discussed with me by any of my supervisors nor was I given either a formal or informal notice." Id. at P 5.

 Subsequent to his resignation, plaintiff contacted Con Ed officials about his pension rights. He was informed that although he would have had a vested pension right had he still been employed by Con Ed on August 1, 1975, the effective date of the ERISA Plan, he had left the company five months too early to qualify under the ERISA Plan. Applying the terms of the Retirement Plan in effect on February 28, 1975, ...


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