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COPELAND v. GEDDES FEDERAL SAVINGS & LOAN ASS'N

August 6, 1999

CONCETTA COPELAND, PLAINTIFF,
v.
GEDDES FEDERAL SAVINGS & LOAN ASSOCIATION RETIREMENT INCOME PLAN; AND GEDDES FEDERAL SAVINGS AND LOAN ASSOCIATION, DEFENDANTS.



The opinion of the court was delivered by: Hurd, United States Magistrate Judge.

MEMORANDUM-DECISION and ORDER

I. INTRODUCTION

The plaintiff, Concetta Copeland ("Copeland" or "plaintiff"), is a resident of Camillus, New York, located within the Northern District of New York, and brings this action pursuant to the Employee Retirement Income Security Act, 29 U.S.C. § 1001-1461 ("ERISA"). The defendant Geddes Federal Savings & Loan Association Retirement Income Plan ("Plan") is an employee benefit plan within the meaning of ERISA § 1002(2)(A). The defendant Geddes Federal Savings and Loan Association ("Bank"), is the administrator of the Plan within the meaning of § 1002 (16)(A) and a fiduciary to the Plan within the meaning of § 1002 (21)(A). Plaintiff is seeking past and future retirement benefits pursuant to the Plan.

II. TRIAL

A one day bench trial was conducted on March 15, 1999, in Syracuse, New York. The plaintiff called five witnesses: (1) Sylvia Salvagno, a former employee of the Bank and a former administrator of the Plan; (2) Gerald Heaton, an actuary called as an expert witness; (3) the plaintiff; (4), Jack F. McPeak, a senior Vice President/Chief Financial Officer with the Bank, and the current administrator of the Plan; and (5) John Harrison, President of the Bank. The defendant called two witnesses: (1) Mr. McPeak; and (2) James A. Hughes, the Plan consultant for the Bank. In addition, the parties stipulated or made no objection to the receipt into evidence of thirty-two documentary exhibits. Post trial memorandums of law were filed by both sides on May 7, 1999.

Based upon a review of the minutes of the trial, the exhibits received into evidence, the pleadings, and all other submissions, together with an evaluation of the credibility of the various witnesses, the following constitutes the Findings of Fact and Conclusions of Law pursuant to Fed. R.Civ.P. 52(a).

III. FINDINGS OF FACT

Copeland was an employee of the Bank from March 24, 1986 to December 31, 1993. As an employee of the Bank, she was, and still is, a participant in the Plan.

The Plan was amended and restated effective January 1, 1981. (Pl's Ex. 1.) On November 13, 1984, the Plan was amended to enhance the early retirement options, including the Social Security Option. The amendment provided that the "[e]arly retirement percentage factor [would be] increase[d] to 1/2 then on present plan tables with an approximate additional annual cost of $3800.00 per year." (Pl.'s Ex. 3.) The adjustment factors to achieve that result were contained in Table A to the Plan. (Pl's Ex. 6.)

In May 1989, Rosemary Campagnoni, a Bank employee, elected to retire under the Social Security Option. She received her retirement benefits as computed using the 1984 Amendment and Table A. Neither the Bank nor the Plan raised any objection or claimed that a mistake was made concerning the calculation of Mrs. Campagnoni's benefits.

In late 1989, two other Bank employees, Emma Fedeli and Jean Avery elected to retire under the Social Security Option. At this time, Mr. Hughes, as the Plan consultant, discovered that the Social Security Option, as amended in 1984, was costing the Plan substantially more than the normal retirement option. He brought this matter to the attention of the Plan's Board of Directors ("Board"), and recommended that they either increase the funding or reduce the Social Security Option benefits.

As a result, on January 12, 1990, the Board passed a resolution proposing to amend the Plan to discontinue using the factors in Table A and, instead, make all of the retirement options actuarially equivalent. (Defs.' Ex. Al.) This resolution became Amendment No. 4 which reads:

  Based upon a motion of the Board of Directors on
  January 12, 1990, the Geddes Federal Savings and Loan
  Association Retirement Income Plan is hereby amended
  as follows effective January 1, 1990:
  Section 10.3 Social Security Option shall be amended
  in it's (sic) entirety and replaced with the
  following:
  "A participant who retires before his or her normal
  retirement date may elect to receive a reduced benefit
  prior to and until his or her social Security
  Commencement date; so that the amount of the benefit
  received from the Plan when combined with anticipated
  Social Security Benefit will remain approximately
  level. Benefits under this option will ...

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