DATE POSTED 10. 10. 2011, By

What to Do if Your Employer Clearly Says It Will Not Pay Your Pension Benefit

Employees in the Chicago area, and elsewhere, come to expect that when their employer sponsors a pension plan, or other type of benefit plan, and promises a benefit, that the employer will honor that promise. That is, unfortunately, not always the case. The first question, though, is what to do about it when the employer, which is usually acting as the plan’s administrator, clearly says it will not pay the benefit? The natural inclination is to want to file a lawsuit, and many people have done that immediately, only to be disappointed by having wasted so much time by failing to exhaust administrative remedies. But why should a claimant have to make an administrative claim to the plan when the employer unequivocally states it will not pay a benefit? The Eight Circuit Court of Appeals analyzed this very issue in Angevine v. Anheuser-Busch Companies Pension Plan, 646 F.3d 1034 (8th Cir. 2011).

In Angevine, Anheuser-Busch was the pension plan sponsor and administrator. The plan provided that if the company were sold or there was otherwise a change in control, participants would get an enhanced pension benefit, a 5+5 benefit (i.e., five years of age and service added to the employee’s current count). When InBev bought out Anheuser-Busch, the company sent an email out to many employees, including Mr. Angevine, unequivocally stating the enhanced 5+5 benefit would not be paid. Mr. Angevine wished to take early retirement, but rather than making a claim to the plan for the enhanced benefit, he immediately sued in court, arguing he did not need to exhaust any administrative remedies because the plan repudiated its obligation to pay the enhanced benefit.

The Court of Appeals held that Mr. Angevine prematurely filed a lawsuit

.and was obligated to pursue administrative remedies–filing a claim with the plan, and exhausting any appeals with the plan. There are only two exceptions to the requirement to exhaust administrative remedies: when doing so would be futile, and when there is no administrative remedy to pursue. The plan stated that the way to pursue an administrative remedy is to file a claim for benefits with the plan. Also, the Court held the administrative remedy would not necessarily be futile because although the email provided the participants with an indication of what the plan administrator would do, it was not certain the plan administrator would deny the claims. The repudiation, while causing the claim to accrue and triggering any statutes of limitations, therefore did not provide a third exception to the requirement to exhaust administrative remedies.

If your retirement plan has indicated to you that it will not pay a benefit to which you think you are entitled under the terms of the plan, consult an experienced ERISA lawyer to determine the proper method to handle the claim.

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