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GENNAMORE v. BUFFALO SHEET METALS

July 14, 1983

ROBERT H. GENNAMORE, Plaintiff,
v.
BUFFALO SHEET METALS, INC., PENSION PLAN AND TRUST and BUFFALO SHEET METALS, INC., Defendants.



The opinion of the court was delivered by: CURTIN

Plaintiff Robert Gennamore commenced this action pursuant to the Employment Retirement Income Security Act [ERISA], 29 U.S.C. 1001 et seq., seeking to obtain pension benefits. He was a full-time employee at Buffalo Sheet Metals, Inc., from July 31, 1967, until May 31, 1977.

When plaintiff began work in 1967, his company provided a retirement plan called the Buffalo Sheet Metals Pension Trust. This plan had been in effect since 1966, and plaintiff became a participant in that plan. The plan provided that an employee's share in the retirement fund would vest upon the conditions that an individual be an employee for ten years and be a plan participant for at least five years.

 On June 1, 1976, an amended plan, the Buffalo Sheet Metals Plan and Trust, was created in compliance with ERISA. Plaintiff became a participant in this plan on that date. The amended plan provides that a participant is eligible for early retirement benefits if he or she has been a company employee for ten years and has reached the age of 55.

 Plaintiff has moved for summary judgment, and defendants have cross moved for summary judgment. The sole issue to be decided is whether plaintiff has accrued ten years of credited service and therefore is entitled to a pension.

 Judicial review in this case is limited to determining if, by denying plaintiff a pension benefit, the trustees of the pension plan have acted in an arbitrary or capricious manner. Haeberle v. Board of Trustees of Buffalo Carpenters, 624 F.2d 1132, 1136 n.6 (2d Cir. 1980); Valle v. Joint Plumbing Industry Board, 623 F.2d 196, 203 (2d Cir. 1980). Plaintiff contends that he has earned ten years of employment credit under the original pension plan and the revised 1976 plan. In particular, he alleges that the policies of ERISA should be applied to both the original retirement and the new plan, see Tucci v. Edgewood Country Club, 459 F. Supp. 940 (W.D. Pa. 1978). Under the Tucci court's analysis of ERISA, plaintiff would be credited a year of participation in the plan for each year in which 1,000 hours were worked, 29 U.S.C. § 1052(a)(3)(A). The calendar for tolling those period would begin on July 31, 1967, the date of hiring and the first date credited for participation in the plan, 29 C.F.R. § 2530.204-2(b). Plaintiff further asserts that he has worked at least 1,000 hours from July 31, 1975, through May 31, 1976, his last work period under the original plan, and therefore is entitled to one year's credited service (see 29 C.F.R. § 2530.203-2(C)(1)). Finally, plaintiff asserts that under the new plan, he worked 1,000 hours between June 1, 1976, and May 31, 1977, and therefore, under the ERISA computation formula, is entitled to one year of credit, 29 U.S.C. § 1052(a)(3)(A). As a result, plaintiff's argument can be summarized as follows: Dates Credited Service July 31, 1976 - July 30, 1968 (1000 hours) 1 year July 31, 1968 - July 30, 1969 (1000 hours) 1 year July 31, 1969 - July 30, 1970 (1000 hours) 1 year July 31, 1970 - July 30, 1971 (1000 hours) 1 year July 31, 1971 - July 30, 1972 (1000 hours) 1 year July 31, 1972 - July 30, 1973 (1000 hours) 1 year July 31, 1973 - July 30, 1974 (1000 hours) 1 year July 31, 1974 - July 30, 1975 (1000 hours) 1 year Subtotal 8 years July 31, 1975 - May 31, 1976 (1000 hours) 1 year (Last year of original plan) June 1, 1976 - May 31, 1977 (1000 hours) 1 year (First year of amended plan) TOTAL 10 years

 Defendants, however, contend that plaintiff has not accrued the requisite ten years of employment credit. In particular, they allege that under the original 1966 plan, an employee was credited with employment service for each full fiscal year that an individual worked under the plan. Defendants further maintain that the fiscal year began on June 1 of each year. Therefore, during plaintiff's first fiscal year of employment (July 31, 1967 - May 31, 1968), he accumulated only ten months of credited service.

 Next, defendants assert that plaintiff earned eight fiscal years of credit for June 1, 1968 through May 31, 1976, the expiration date of the original plan, and that plaintiff was credited one additional fiscal year for June 1, 1976, through May 31, 1977, the first year of the amended retirement plan. In sum, in applying the fiscal year criteria, defendants contend that plaintiff accumulated only nine years and ten months of employment credit. The following chart illustrates this theory of computation: Dates Credited Service July 31, 1967 - May 31, 1968 10 months June 1, 1968 - May 31, 1976 8 years (Expiration date of original plan) June 1, 1976 - May 31, 1977 1 year (First year of amended plan 1000 hours worked) TOTAL 9 years, 10 months

 In support of its contention that years of service should be measured from the fiscal year of June 1, defendants refer to sectiion 3.01 of the original pension plan. That section reads in part:

 Every employee . . . who is in the employ of the Employer on the effective date of this Trust or any Anniversary Date thereof, shall be eligible to participate in the Plan on the Anniversary Date coinciding with or next following his completion of three (3) years of continuous employment. . . .

 Additional related sections relied upon by defendants include section 1.02, which provides in part that "June 1, 1957 shall be the effective date of this Trust. . . ." Section 2.09 provides that the "Anniversary Date" shall mean the effective date set forth in Section 1.02 [June 1, 1957] and each anniversary thereof." Finally, section 4.05 provides in part that "[e]ach Policy shall have an issue date the same as an Anniversary [sic] Date [i.e., June 1]. . . ."

 Upon review of these provisions, it is clear that none of these sections refers to the method of computing credited employment service. Section 4.05 deals solely with the issue date of an employee's policy. Section 3.01 pertains only to an employee's eligibility to participate in the plan.

 Both parties agree that plaintiff is credited with service from the first day of employment (Docket Items 8, 9, 10, 13). June 1, the anniversary date, therefore, is cited in the plan for the purpose of determining when an employee may officially join the plan. This cite does not provide, however, the date when an employee's period of credited service begins to accumulate.

 As additional support of their contention, defendants rely upon an affidavit by Lawson Finger, a trustee of the retirement plan, who states in part that:

 Under the 1966 plan the employees were credited with years of service for each full fiscal year that the employee worked under the plan. The fiscal year for the plan commenced on June 1 of each year.

 Thus, during the first fiscal year of the plaintiff's employment, that is the date of his employment on July 31, 1967, until the end of the pension plan fiscal year on June 1, 1968, the plaintiff had ...


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