Third Circuit Affirms that Pension Fund Acted Arbitrarily in Suspending Retiree’s Benefits

In Rombach, III v. Plumbers Local Union No. 27 Pension Fund, No. 24-2482, 2025 WL 3110791 (3d Cir. Nov. 6, 2025), the Third Circuit affirmed the district court’s judgment that the pension plan acted arbitrarily and capriciously under ERISA when it suspended a participant’s early retirement benefits.

Clyde Rombach was a longtime member of Plumbers Local Union No. 27, working for W.G. Tomko, Inc. as a foreman and project manager from 1989 to 2008. During that time, Tomko contributed to the union’s pension fund on his behalf. In 2009, Rombach was promoted to Senior Project Manager, a non-union position that involved the same core duties with some added supervisory responsibility. As a result, Tomko stopped making contributions to the pension plan.

In 2016, while still employed in this role, Rombach applied for early retirement benefits under the Plan. The Plan determined he was eligible for early retirement but suspended his benefits because he was “re-employed in the plumbing and pipefitting industry” in a “trade or craft utilized in the industry,” as defined in the Plan’s suspension clause.

Rombach challenged the suspension under ERISA § 502(a)(1)(B), 29 U.S.C. § 1132, arguing that his management-level work did not constitute employment “in a trade or craft.” The district court agreed, holding that the Plan’s decision was arbitrary and capricious, and ordered reinstatement of his benefits with interest. The Plan appealed.

The Third Circuit affirmed the district court’s ruling in full. Writing for the court, Judge Krause emphasized that while plan administrators generally receive deference when interpreting ambiguous plan terms, such deference applies only when the administrator actually articulates a reasoned interpretation.

Here, the Plan failed to define or explain what it meant by “trade or craft.” Its justification—that Rombach’s position as a Senior Project Manager was “a trade/craft utilized in the construction industry”—was a tautology, not an interpretation. Because the Plan failed to exercise its interpretive discretion meaningfully, the court reviewed the decision de novo.

Consulting contemporaneous dictionary definitions, the court found that “trade or craft” refers to occupations requiring manual or artistic skill, distinguishing them from professional or managerial work. Since Rombach’s Senior Project Manager role involved professional office duties rather than manual labor, the court concluded it was not a trade or craft and that the Plan had erred in suspending his benefits

The Plan also argued that the district court should have remanded the matter for reconsideration rather than ordering reinstatement and payment of benefits. The Third Circuit rejected this argument as forfeited, noting that the Plan had not raised it below. The same fate met the Plan’s challenge to the order requiring it to “reverse the financial and any other impact” of the suspension—the court found this objection similarly waived.

This decision underscores that plan administrators must provide clear, reasoned interpretations when applying ambiguous plan terms. Merely invoking conclusory language will not earn deference under ERISA’s arbitrary-and-capricious standard. Moreover, where a plan’s rationale is absent from the administrative record, courts will review the determination de novo and may order retroactive reinstatement of benefits without remand.