Second Circuit: Pension Plan’s Amendment Reducing Benefits Applies to Pensioner Who Submitted Claim for Disability Pension Before Amendment Effective Date

Cannady v. Bd. of Trustees of the Boilermaker-Blacksmith Nat’l Pension Tr., Boilermaker-Blacksmith Nat’l Pension Tr., No. 20-3141-CV, 2022 WL 151298 (2d Cir. Jan. 18, 2022) involves a dispute over the proper calculation of pension benefits. Plaintiff-Appellant Steven Cannady appealed the district court’s judgment in favor of Defendants-Appellees, the “Trustees”, who the district court found to have properly calculated Cannady’s pension benefits under an amendment to the pension plan that the Trustees determined applied to Cannady’s claim. The Pension Trust adopted Amendment 4 to the Pension Plan after its actuaries projected that it would enter “critical” funding status. Amendment 4, with an effective date of October 1, 2017, reduced the monthly amount of disability pension benefits for many participants. On August 8, 2017, Cannady applied for a disability pension benefit. “The Pension Trust determined that, because Cannady’s Annuity Starting Date (“ASD”) under the Plan was November 1, 2017, and because (absent an exemption not applicable to Cannady), Amendment 4 applied to all Plan disability pension benefits with an ASD on or after October 1, 2017, Cannady was subject to the reduced benefits under Amendment 4.” Cannady brought suit under ERISA § 502(a)(1)(B) for wrongful denial of benefits and for breach of fiduciary duty under ERISA § 502(a)(3).

The Second Circuit determined that the plain language of the Pension Plan unambiguously states that Cannady’s benefits are to be calculated based on the ASD. Because his ASD fell after the Amendment’s effective date, the Amendment’s revised calculation applies to Cannady’s benefits. The Plan makes no reference to the claim filing date with respect to the relevant date for when determining which benefits are impacted by Amendment 4. Cannady also argued that the district court erred in failing to consider his separate claim that Amendment 4 violates ERISA’s anti-cutback rule. Cannady did not allege an anti-cutback claim in his Complaint and raised it for the first time on summary judgment. Though the Complaint cites to the “catch-all provision” of ERISA § 502(a)(3), this was not sufficient notice to the Pension Trust as to the precise claim being asserted. The court affirmed the order and judgment of the district court.