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EHRLICH v. NYNEX CORP.

December 27, 1996

SYLVIA EHRLICH, Plaintiff, against NYNEX CORPORATION, et al., Defendants.


The opinion of the court was delivered by: KAPLAN

 LEWIS A. KAPLAN, District Judge.

 The plaintiff in this case, the former wife of a retired NYNEX employee, was awarded, in substance, a 50 percent interest in her former spouse's NYNEX pension benefits by the New York court that issued the divorce decree dissolving the marriage. She now claims that she is entitled to obtain that interest in a lump sum rather than in the form of monthly payments commencing when her former spouse reaches age 65. The parties cross-move for summary judgment. *fn1"

 Facts

 Plaintiff's former husband, Ron S. Ehrlich, was a salaried NYNEX employee in late 1991, when NYNEX created the NYNEX Force Management Plan ("FMP"). The FMP was an administrative process employed by NYNEX to get rid of unnecessary employees -- in the current parlance, to "downsize" its work force. It was not an employee benefit plan.

 Mr. Ehrlich was covered by NYNEX's Management Pension Plan (the "Plan"), which is organized and maintained pursuant to the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq. ("ERISA"). The Plan provides for the payment of pension benefits, generally in the form of a monthly annuity based upon the participant's age and length of service at the time of separation from NYNEX. The Plan, however, was amended, effective January 1, 1992, to permit certain individuals who separated from NYNEX under the FMP to elect to receive their accrued benefits in the form of a single lump sum distribution. (Donovan Aff. P 3 & Ex. 1: Pl. 3(g) P 3) A "Force Management Plan Update" dated January 29, 1992 advised management employees that those leaving the company under the FMP during 1992 could elect the lump sum option by returning a Lump Sum Distribution Election Form to the Benefit Office within 90 days from its receipt. (Littlefield Aff. P 5 & Ex. 3; Pl. 3(g) P 6)

 Mr. Ehrlich left NYNEX pursuant to the FMP on February 28, 1992. He did not elect the single lump sum distribution option. (Pl. 3(g) PP 4-5) Thus, under the terms of the Plan, his benefit will be paid in a monthly annuity beginning at age 65.

 The state court subsequently issued a preliminary injunction on April 21, 1992. Insofar as is relevant here, the order provided:

 
"The court herewith directs that in the event defendant requests distribution, withdrawal or liquidation of the matter (paragraph B(a) through (e) set forth in the court's order of March 11, 1992, from . . . NYNEX, that said paying entity withhold one half of the sum requested by defendant for withdrawal, liquidation, or distribution and place said sum into an interest bearing escrow account to be held by plaintiff's counsel . . . pending further court order." (Id. Ex. B-9, at 2)

 The cross reference to paragraph B(a) of the March 11 order demonstrates that this language applied to Mr. Ehrlich's interest in the Plan. (Id. Ex. B-7)

 On June 3, 1993, the Ehrlichs entered into a Separation and Settlement Agreement which recited, inter alia, that Mr. Ehrlich was entitled to "certain pension/retirement monies" by virtue of his former employment by NYNEX and stated that "the parties agree that a QDRO *fn3" ] shall issue transferring, without tax consequences, fifty (50%) percent of the aforementioned monies to wife." (Id. Ex. B-1, Art. X, P 3) On June 9, 1993, the state court issued a qualified domestic relations order acknowledging Mr. Ehrlich's assignment to Mrs. Ehrlich of "fifty (50%) percent of his interest in the pension benefits . . . to be received from . . . NYNEX" and directing that the Plan "pay over to the Alternate Payee [Mrs. Ehrlich] the monies called for in the Order . . ." (S. Ehrlich Aff. Ex. B-13, at 4) The order went on to provide, however:

 
"that, in accordance with the aforementioned [Separation] Agreement, this Order is not intended to nor does it require any plan to provide any type or form of benefit, or any option, not otherwise provided under the plan . . . ." (Id., at 7)

 While the circumstances of its issuance are not clear, the record contains also a further order of the state court, filed March 7, 1995, in which the court ordered that the plan pay to Mrs. Ehrlich "fifty (50%) percent of [Mr. Ehrlich's] monthly benefits in the Plan commencing receipt of benefits by" Mr. Ehrlich and reiterated that the order did not require the Plan "to provide any type or ...


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