Eighth Circuit Affirms Denial of Disability Pension Where Claimant Failed to Submit Social Security Disability Notice of Award with Application for Pension Benefits

Ruessler v. Boilermaker-Blacksmith Nat’l Pension Tr. Bd. of Trustees, No. 21-3876, __F.4th__, 2023 WL 2750829 (8th Cir. Apr. 3, 2023) involves a challenge of a denial of disability pension benefits under the Boilermaker-Blacksmith National Pension Trust, a Taft-Hartley fund. Plaintiff-Appellant Adam Ruessler sued the Pension Trust Board of Trustees for denying his application for a disability pension just prior to the effective date of a Plan amendment which reduced the benefits payable. The district court granted summary to the Board, and Ruessler appealed. The Eighth Circuit affirmed.

The parties agree that the benefits under the Pension Trust are governed by the terms of the Thirteenth Restatement of the Pension Plan Document (“the Plan”). The Plan provides a disability pension to certain participants who become totally and permanently disabled before reaching age 65 if the participant has been awarded a Social Security Disability Insurance (“SSDI”) Benefit (Section 4.09(a)) and has filed a written application for benefits together with a SSDI notice of award from the Social Security Administration (Section 4.09(d)). Ruessler became disabled in 2015 and applied for SSDI benefits that year. Ruessler applied for disability pension benefits under the Plan in July 2017, though he had not yet been awarded SSDI. Early 2017, the Board adopted an amendment to the Plan which significantly reduced benefits under the disability pension for annuity start dates on or after October 1, 2017. The annuity start date is determined by when one applies for benefits. Based on Ruessler’s July 2017 application, his projected annuity start date was September 2017.

After Ruessler submitted his application for disability pension benefits, the Board contacted him numerous times to notify him that he needed to provide the Board with an SSDI notice of award. The Board advised him in writing that if the SSDI notice of award was not received within 180 days from when the application was filed, it would be denied and he would need to complete a new Pension Application. The Board interpreted Section 10.01(c) of the Plan as requiring that it decide claims within 180 days from the date the Pension Trust receives the application. The Board denied Ruessler’s claim in January 2018, about 180 days after it received his application. The Plan provides that a claimant may appeal a denied claim (Section 10.03(e)), submit documents related to the claim (Section 10.01(g)(1)), and the Board must review the documents regardless of whether the information was submitted or considered in the initial benefit determination (Section 10.01(g)(4)). The Board must decide the claim anew without giving deference to the initial decision. Section 10.01(g)(5). Ruessler appealed the denial and submitted a ”Notice of Decision-Fully Favorable” from the SSA on his claim for SSDI benefits. The Board denied Ruessler’s appeal on the basis that he applied for a disability pension with a filing date of July 17, 2017 and did not provide a copy of his SSDI Notice of Award within the 180-day time period that the Board had to make a decision. The Board cited the Plan provisions which made eligibility under the Plan contingent on whether a claimant has been awarded SSDI and submitted a written application together with a notice of award. Ruessler reapplied for benefits in 2020 and began receiving a reduced early retirement pension. He filed a lawsuit seeking payment of wrongfully denied benefits under ERISA Section 502(a)(1)(B) and for breach of fiduciary duties under ERISA Section 501(a)(3).

On the standard of review, the Eighth Circuit declined to decide whether a Taft-Hartley fund, the administration of which is structured in a way that includes equal representation of employees and employers, has the kind of conflict of interest that must be considered under MetLife v. Glenn. This is because even assuming that a conflict of interest does exist, and is given the appropriate amount of weight, it does not change the outcome of this case.

The court explained that the Board did not abuse its discretion in denying Ruessler’s July 2017 application because the Board reasonably interpreted the Plan as requiring the notice of award be provided at the time the application is submitted, but no later than the 180 days that the Board has to decide the claim. The court rejected Ruessler’s argument that he could cure the defect by submitting the notice of award with his appeal. The Board’s duty to decide the claim anew does not extend the opportunity to submit the notice of award. Applying the Plan terms this way does not render any provision meaningless. On appeal, an applicant could submit documentation showing that he did timely provide the required documents.

The court also found that the Board did not violate any of its fiduciary duties with respect to its communications with Ruessler about his application. Specifically, it found that the Board did not fail to disclose material information that could adversely affect Ruessler’s interests. Ruessler argued that the Board’s statements in the January 2018 denial letter were incomplete because they presented the appeal as the only path towards benefits. He argued that the Board should have informed him that he could reapply for benefits while his appeal was pending and that it had a duty to inform him that the Notice of Decision he submitted during the appeal was insufficient. The court found that the Board did not breach the duty of loyalty to Ruessler because it did inform him on several occasions that if the notice of award was not received that his application would be denied, and he would need to complete a new application. The Board also advised him that he would need to submit a “Notice of Award.” For these reasons, the Eighth Circuit affirmed the judgment of the district court.