May 24, 2019

Tenth Circuit: Unambiguous Language of Pension Plan Precludes Relief Sought

The Tenth Circuit Court of Appeals issued its opinion in Martinez v. Plumbers & Pipefitters National Pension Plan on Wednesday, July 29, 2015.

Joseph Martinez was a long-term participant in the Plumbers and Pipefitters National Pension Plan, a multiemployer defined benefit pension plan governed by ERISA. In 2004, Martinez retired from plumbing and utilized the Plan’s contingent early retirement pension. He simultaneously applied for Social Security disability benefits but was denied, causing his provisional early retirement pension to automatically convert into a non-disability Early Retirement Pension. In 2006, Martinez decided to return to work and his Early Retirement Pension benefits were suspended pursuant to the Plan’s provisions. When he retired again in 2009, Martinez’s Early Retirement Pension benefits resumed after a six-month suspension period. Martinez again applied for Social Security disability benefits and this time was approved. He sought to convert his Early Retirement Pension into a Disability Pension at that time, which would have provided him a much larger monthly stipend. The Plan administrator denied his request based on the Plan language.

Martinez utilized the Plan’s appeal process and appealed the adverse determination to the Plan’s Board of Trustees, arguing (1) because he now met the criteria for disability under the plan, his benefits should be converted to disability benefits; (2) the SSA’s favorable determination should trigger an automatic conversion under the Plan; and (3) he was entitled to an adjustment because his return to work and subsequent re-retirement resulted in a new effective date of benefits. The Trustees upheld the denial of benefits, maintaining that the Plan provisions precluded him from converting his benefits. Martinez next sought review in state court, and the Plan removed to federal court. The district court also affirmed the denial of benefits for the same reasons as the Trustees. Martinez appealed to the Tenth Circuit.

The Tenth Circuit reviewed the Plan and determined that the Plan language unambiguously precluded the relief sought by Martinez. The Plan contains specific provisions for conversion to disability benefits, which did not apply to Martinez’s situation, and also contains language for the situation where an early retirement pensioner returns to work for a period of time. The Tenth Circuit expressed sympathy for Martinez but upheld the Plan’s denial of benefits.

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