Opinion
No. 98 Civ. 5098 (AJP).
April 5, 2000.
OPINION AND ORDER
This ERISA interpleader action involves a family dispute as to who gets half of the deceased's remaining pension benefits, the deceased's daughters or his second wife who already has received half the pension benefits. The facts are stipulated, the parties have cross-moved for summary judgment as to interpretation of the pension plan documents, and the parties have consented to decision of this action by a Magistrate Judge pursuant to 28 U.S.C. § 636(c). For the reasons set forth below, the Court holds that the daughters are entitled to the disputed pension funds.
FACTS
The Parties
Plaintiff Israel Aircraft Industries International, Inc. Defined Benefit Pension Plan (the "Plan") is a defined benefit pension plan which is a "qualified plan" within the meaning of § 401(a) of the Internal Revenue Code and is subject to the requirements of the Employee Retirement Income Security Act ("ERISA") of 1974, 29 U.S.C. § 1001 et seq., as amended. (Stip. ¶ 1.) Plaintiff Israel Aircraft International, Inc. ("Israel Aircraft") is Plan Administrator for the Plan. (Stip. ¶ 2.)
Defendants Karen Bica and Maureen Quinn are the daughters of now deceased Plan participant Joseph D. Bica by his first marriage. (Stip. ¶ 3.) They are referred to herein as the "daughters." Defendant Jo Ann Sheehan Bica is the second wife and surviving spouse of Joseph Bica. (Stip. ¶ 4.) She is referred to herein as the "second wife" or the "stepmother."
Background to This Dispute
On April 17, 1985, Joseph Bica executed a beneficiary designation with respect to his benefits under the Plan naming his daughters as beneficiaries. (Stip ¶ 5 Ex. B; see also Cohen Dep. at 7-8.) On June 12, 1988, Joseph Bica married Jo Ann Bica and he was married to her at his death. (Stip. ¶ 6.) Joseph Bica passed away on November 15, 1996 with a vested retirement benefit under the Plan, but no Plan benefits had yet been paid. (Stip. ¶ 7.)
By letter dated May 28, 1997, the Plan Administrator determined that approximately half of the death benefit under the Plan was payable to Jo Ann Bica as Joseph's surviving spouse and that Joseph's designated beneficiaries, his daughters, were entitled to the remainder of the death benefit in equal shares. (Stip. ¶¶ 8 Ex. C.) The Plan Administrator explained:
Please be advised that we have reviewed the terms of the IAI International, Inc. Defined Benefit Pension Plan (the "Plan") with respect to the payment of benefits following the death of Joseph D. Bica. This letter explains the determination we have made regarding the death benefit. . . . . . . .
Joseph Bica was born on April 4, 1931 and died on November 15, 1996. He had attained the age of 55 years on April 4, 1986, the earliest retirement age under the Plan, although he had not applied for his retirement pension at the time of his death. (The actuarially-determined present value of his Plan benefit at the time of his death payable in a single sum on July 1, 1997, is $481,108.80.)
By a beneficiary designation dated April 17, 1985, Joseph Bica designated his daughters, Karen Bica and Maureen Quinn, as beneficiaries of his Plan benefit. . . . [and that] beneficiary designation remained operative at the time of his death.
This beneficiary designation, however, was executed prior to his 1988 marriage. As Mr. Bica's surviving spouse, you [Jo Ann] are entitled to a portion of Mr. Bica's retirement benefit notwithstanding any outstanding beneficiary designation to the contrary. The portion to which you are entitled is approximately equal to one-half of Mr. Bica's vested accrued benefit, calculated as if he had begun to receive his benefit on the day of his death and had elected the 50% Contingent Annuitant option with you as his surviving beneficiary (see page 7 of the Summary Plan Description and Section 5.10 of the Plan). Your share therefore is equal to the 50% survivor portion of Mr. Bica's benefit payable as a 50% Contingent Annuity. Any portion of a participant's benefit which is not payable automatically to the surviving spouse is payable, in an actuarially equivalent single sum, or life annuity, to the participant's designated beneficiar(ies). (See section 5.9 of the Plan.)
We have therefore determined that Mr. Bica's Plan benefit is payable, by reason of his death, as follows:
1. Approximately one-half to you [Jo Ann] as Mr. Bica's surviving spouse calculated in the manner described above. We have previously provided you with information and election forms regarding the payment options available. You have made your election, and your full share is being processed.
2. The remaining portion of the benefit in equal shares to his daughters, Karen Bica and Maureen Quinn. This benefit is payable in a single sum equal to the present value of the remaining portion of Mr. Bica's accrued benefit at the time of his death. Assuming that distribution to Ms. Bica and Ms. Quinn is paid on or before July 1, 1997, the single sum value of this portion of the benefit is $210,125.30, or $105,062.65 apiece (approximately one-quarter of the total benefit payable) to each of Ms. Bica and Ms. Quinn.
(Stip. Ex. C: 5/28/97 Letter from the Plan Administrator, Alan Cohen; see also Cohen Dep. at 9-11.)
On June 16, 1997, Jo Ann Bica was paid a "Surviving Spouse's Benefit" of $268,365.31. (Stip. ¶ 9; see also Cohen Dep. at 10-11, 19-20.) On July 30, 1997, Jo Ann Bica appealed the Plan Administrator's determination, claiming entitlement to the entire accrued benefit under the Plan. (Stip. ¶ 10.) On August 4, 1997, Maureen Quinn appealed the Plan Administrator's determination of the award of the Surviving Spouse's Benefit to her stepmother. (Stip. ¶ 11.)
By letter dated August 26, 1997, the Plan Administrator determined that Jo Ann Bica was entitled to receive the Surviving Spouse benefit payment as Joseph's surviving spouse. However, the Plan Administrator declined to make a final determination on Jo Ann's appeal and distribute the remaining funds unless all three parties agreed in writing to abide by the Plan Administrator's determination and to hold the Plan harmless with respect to the distributions made in accordance with its determination. (Stip. ¶ 12 Ex. D.) The Plan Administrator's August 28, 1997 letter explained:
1. Maureen Quinn's appeal. The Plan administrator has determined, with respect to the appeal made on behalf of Maureen Quinn, that Jo Ann Bica as Joseph Bica's surviving spouse is entitled to that portion of the benefit payable as the result of his death which is required to be paid to her as a qualified preretirement survivor annuity ("QPSA") pursuant to Sections 401(a)(11)(A)(ii) and 417(c) of the Internal Revenue code ("Code"). This amount, which is equal to the amount described as payable to Mrs. Bica in our letter of May 28, 1997, is payable to her notwithstanding the existence of Mr. Bica's prior beneficiary designation. This result is required by law (i.e., Code section 401(a)(11)(A)(ii)), as well as Section 5.9 of the Plan.
Section 5.9 of the Plan describes the Plan's Death Benefit, payable to the participant's designated beneficiary. The Death Benefit is equal to the excess, if any, of
a) the Actuarially Equivalent single sum value of the Participant's Accrued Benefit as of the date of his death over
b) the Actuarially Equivalent single sum value of the Surviving Spouse's Benefit payable under Section 5.10 of the Plan and not waived.
The Plan document, therefore, contemplates that the Death Benefit awarded to the designated beneficiaries will be reduced by the Surviving Spouse's Benefit payable.
Section 5.10(a) of the Plan describes the Surviving Spouse's Benefit, which is the QPSA required by Code section 401(a)(11)(A)(ii). This benefit is described as the monthly pension benefit the surviving spouse would have received had the Participant:
— had a separation from service on the date of his death (if he is then an employee);
— had survived to the Benefit Commencement Date elected by the Surviving Spouse; and
— had then begun to receive an immediate retirement benefit.
The "immediate retirement benefit" described above is the qualified joint and 50% survivor annuity (QJSA), which is the Plan's required form of benefit for married participants unless waived. See Section 7.2(b) of the Plan and section 401(a)(11)(A)(I) of the Code. Because the Plan's QJSA is determined on the basis of a 50% surviving spouse's annuity, the value of the QPSA under Section 5.10 of the Plan is approximately one-half of the total benefit payable on account of Mr. Bica's death.
2. Jo Ann Bica's appeal.
(a) It was the intent of the Company in designing the Plan that the above-quoted second paragraph of Section 5.10(a), describing the surviving spouse's right to elect, in lieu of a monthly pension, "the Actuarially Equivalent single sum value of the participants' vested Accrued Benefit," afford the surviving spouse a single sum distribution alternative to the monthly Surviving Spouse's Benefit. It was not intended by such language to afford the spouse an opportunity to elect to receive a single sum distribution of the Participant's entire benefit (in addition to the Surviving Spouse's Benefit), notwithstanding the Participant's beneficiary designation.
(b) We nevertheless take note of your observation regarding the use of the words "Accrued Benefit" in the above-quoted second paragraph of Section 5.10(a), and the definition of that term in Article I of the Plan.
At his deposition, Plan Administrator Cohen elaborated that Section 5.10(a) "is not supposed to contraindicate the amount of benefit, in other words, it is not giving the widow the right to a benefit that is not given to her somewhere else in the plan, it is not meant to contradict anything else." (Cohen Dep. at 16.)
(Stip Ex. D: 8/26/97 Letter from the Plan Administrator, Alan Cohen; see also Cohen Dep. at 11-16.)
Plaintiff commenced this interpleader action on July 30, 1998, and deposited the disputed amount (plus interest) into the Registry of the Court. (Stip. ¶¶ 13-14.)
On March 22, 2000, the parties stipulated that plaintiff would receive $25,000 from the funds in the Court's Registry for its attorneys' fees, and plaintiff was dismissed from the action. (Dkt. No. 31: 3/22/00 Consent Order.)
The parties took the deposition of Plan Administrator Alan Cohen, who further explained the interplay between Sections 5.9 and 5.10 of the Plan:
Q. So this provision [§ 5.9] says, tell me if I am correct, if there's any benefit left after payments [that] are to be made to the spouse, then it would go to the sisters?
A. That's correct.
Q. Let's go to section 5.10 of the plan.
The first paragraph 5.10 of the plan generally describes what is known as preretirement survival annuity which means that in the event of the death of a participant, the spouse gets in essence 50 percent of the benefit payable, correct?
A. Correct.
Q. Then there's a second paragraph in that section. It says, notwithstanding the foregoing, the surviving spouse may elect in writing to receive the actuarially equivalent single-sum value of the participant's vested accrued benefit as of the participant's date of death in a single-sum payment as soon as it is practicable after the participant's death.
What does participant's accrued benefit mean, does it mean the full benefit that was earned by Joseph Bica, in other words, he had 400,000 and change in the plan, or does the accrued benefit mean 400,000 or does it mean 50 percent or 200,000, what does accrued benefit mean under the terms of the plan?
A. This was something that I discussed with counsel and his determination was that this particular paragraph referred only to the opportunity to elect a single payment, to elect a method of payment, rather the single sum rather than a payout over a period of years. This does not necessarily, according to counsel, this has nothing to do to override something else that's calculated in another section. . . . .
Q. After your counsel advised you that this is the proper interpretation, did you feel comfortable that that was the proper interpretation?
A. Yes.
Q. What was the basis of you being comfortable that that was a proper interpretation?
A. His explanation was that this particular paragraph, while maybe a little bit vague, is the intent of the paragraph to afford the surviving spouse an election as to the method of payment and not to override something that's determined somewhere else and to be entitled to something that she is not otherwise entitled to.
(Cohen Dep. at 22-24.) He further emphasized:
Cohen explained that as a result of this lawsuit, the Plan revised the wording to remove the potential for ambiguity, and the revision was "in line with the determination" made by the Plan's counsel in this case.
Q. Pursuant to the Plan set forth, are the daughters entitled to their 50 percent portion under the pension plan?
A. Yes, they are.
Q. Is the spouse entitled to any other portion aside from what she has already been paid?
A. Not under the plan.
(Cohen Dep. at 17-18.) At his deposition, Plan Administrator Cohen reiterated the conclusions he had reached in his May 28, 1997 and August 26, 1997 pre-litigation letters to the disputing daughters and stepmother: "I stand by the earlier interpretation . . . that 50 percent contingent annuitant would be payable to Mrs. [Jo Ann] Bica and the balance would be paid to the named beneficiaries," that is, the daughters. (Cohen Dep. at 14; see also id. at 27.)
The Plan Provisions in Issue
This controversy is governed by Sections 5.9 and 5.10(a) of the Plan, which provide as follows:
5.9 Death Benefits.
(a) If a Participant who has any vested interest in his Accrued Benefit under the Plan dies before his Benefit Commencement Date, the Participant's designated beneficiary shall be paid a death benefit equal to the excess, if any, of: (1) the Actuarially Equivalent single-sum value of the Participant's vested Accrued Benefit as of the date of his death, over (2) the Actuarially Equivalent single-sum value of the Survivor's benefit payable under Section 5.10 and not waived, if any.
(b) The death benefit determined in accordance with Subsection (a) of this Section shall be payable to the Participant's designated beneficiary in a single sum or in such other manner as elected by the beneficiary.
5.10 Survivor's Benefit for Surviving Spouse.
(a) Subject to Subsection (b) of this Section, if a Participant who has any vested interest in his Accrued Benefit under the Plan dies before his Benefit Commencement Date and has a Surviving Spouse, such Surviving Spouse shall receive a survivor's benefit. Such benefit shall be a monthly pension for life. . . . Subject to Section 5.12, the survivor's benefit shall be the benefit such Surviving Spouse would have received if the Participant (1) had a Separation from Service on the date of his death (if he is then an Employee), (2) had survived to the Benefit Commencement Date elected by the Surviving Spouse, (3) had then begun to receive an immediate retirement benefit. If the Participant dies before his Benefit Commencement Date but after he has elected an optional form of benefit that is a joint and survivor annuity with the Participant's Spouse that provides for periodic payments after the Participant's death each of which is not less than fifty percent (50%) nor more than one hundred percent (100%) of the periodic payment to the Participant, the survivor's benefit shall be the benefit to which the Spouse is entitled under the optional form elected by the Participant.
Notwithstanding the foregoing, the Surviving Spouse may elect in writing to receive the Actuarially Equivalent single-sum value of the participant's vested Accrued Benefit as of the Participant's date of death in a single sum payment as soon as is practicable after the Participant's death.
(Stip. Ex. A: Pension Plan ¶¶ 5.09, 5.10(a), emphasis added.) Another relevant plan provision is:
7.2 Normal Form of Benefit. . . . .
(b) The normal form of benefit for a Participant who has a Spouse as of his Benefit Commencement Date shall be a joint and survivor annuity, with monthly installments payable after the death of the retired Participant to his Surviving Spouse, if he leaves one, for the life of the Surviving Spouse in an amount equal to fifty percent (50%) of the benefit paid to the retired participant.
(Id. § 7.2.)
The Plan gives the Plan Administrator the duty and power "to construe and interpret the provisions of the Plan and supply any omissions in accordance with the intent of the Plan," and any such determinations "shall be conclusive and binding on all parties." (Id. §§ 9.2(f), (j).)
ANALYSIS
I. THE APPLICABLE STANDARD OF REVIEW
The facts in this case are stipulated, and the summary judgment standards under Rule 56, Fed.R.Civ.P., are well known and will not be set out here. See, e.g., Greenfield v. City of New York, 99 Civ. 2330, 2000 WL 124992 at *3-4 (S.D.N.Y. Feb 3, 2000) (Peck, M.J.); Weber v. Parfums Givenchy Inc., 49 F. Supp.2d 343, 352-53 (S.D.N.Y. 1999) (Wood, D.J. Peck, M.J.); Vanguard Municipal Bond Fund, Inc. v. Cantor, Fitzgerald, L.P., 40 F. Supp.2d 183, 188-89 (S.D.N.Y. 1999) (Stein, D.J. Peck, M.J.); Douglas v. Victor Capital Group., 21 F. Supp.2d 379, 387-88 (S.D.N.Y. 1998) (Stein, D.J. Peck, M.J.); see also, e.g., Jiras v. Pension Plan of Make-Up Artists Hairstylists Local 798, 95 Civ. 9242, 1997 WL 639243 at *6 n. 7 (S.D.N.Y. Oct. 16, 1997) (Peck, M.J.) (discussing implications of summary judgment motions in pension cases using the arbitrary and capricious review standard), aff'd, 170 F.3d 1623 (2d Cir. 1999).
A. The Legal Standard
Courts review the denial of pension benefits under the standard of review announced by the Supreme Court in Firestone Tire Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 956-57 (1989). See, e.g., Kinstler v. First Reliance Standard Life Ins. Co., 181 F.3d 243, 249 (2d Cir. 1999); Sullivan v. LTV Aerospace Defense Co., 82 F.3d 1251, 1254 (2d Cir. 1996); Jiras v. Accord, e.g., Kinstler v. First Reliance Standard Life Ins. Co., 181 F.3d at 249; Sullivan v. LTV, 82 F.3d at 1255; Miller v. United Welfare Fund, 72 F.3d 1066, 1070 (2d Cir. 1995); Pagan v. NYNEX Pension Plan, 52 F.3d 438, 441 (2d Cir. 1995); O'Neil v. Retirement Plan for Salaried Employees of RKO General, Inc., 37 F.3d 55, 59 (2d Cir. 1994); Jiras v. Pension Plan, 1997 WL 639243 at *5; Maida v. Life Ins. Co. of N. Am., 949 F. Supp. 1087, 1091 (S.D.N.Y. 1997); Schein v. News America Publ'g, Inc., 89 Civ. 0052, 1991 WL 117638 at *3-4 (S.D.N.Y. June 24, 1991).
Pension Plan of Make-Up Artists Hairstylists Local 798, 95 Civ. 9242, 1997 WL 639243 at *5 (S.D.N.Y. Oct. 16, 1997) (Peck, M.J.); Cossack v. Burns, 970 F. Supp. 108, 114 (N.D.N.Y. 1997). Review is de novo "unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan," in which case review is under the more deferential "arbitrary and capricious" standard. Firestone Tire Rubber Co. v. Bruch, 489 U.S. at 115, 109 S.Ct. at 956-57. Under the arbitrary and capricious standard, the scope of review is "narrow," and the Court is not to substitute its judgment for that of the Trustees. E.g., Bowman Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 285-86, 95 S.Ct. 438, 442 (1974); Pagan v. NYNEX Pension Plan, 52 F.3d at 442; Jiras v. Pension Plan, 1997 WL 639243 at *5; Crean v. New York City Dist. Council, 94 Civ. 1702, 1996 WL 389248 at *5 (S.D.N Y July 11, 1996).
Accord, e.g., Kinstler v. First Reliance Standard Life Ins. Co., 181 F.3d at 249; Miller v. United Welfare Fund, 72 F.3d 1066, 1070 (2d Cir. 1995); Pagan v. MYNEX Pension Plan, 52 F.3d 438, 441 (2d Cir. 1995); O. Neil v. Retirement Plan for Salaried Employees of RKO General, Inc., 37 F.3d 55, 59 (2d Cir. 1994); Jiras v. Pension Plan, 1997 WL 639243 at *5; Maida v. Life Ins. Co., 949 F. Supp. 1087, 1091 (S.D.N.Y. 1997); Schien v. News America Publ'g, Inc., 89 Civ. 0052, 1991 WL 117638 at *3-4 (S.D.N.Y. June 24, 1991).
The "court [is] required to consider `whether [the defendant's] decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.'" Zuckerbrod v. Phoenix Mutual Life Ins. Co., 78 F.3d 46, 49 (2d Cir. 1996) (quoting Jordan v. Retirement Comm. of Rensselaer Polytechnic Inst., 46 F.3d 1264, 1271 (2d Cir. 1995)). In other words, "[u]nder the arbitrary and capricious standard of review, we may overturn a decision to deny benefits only if it was `without reason, unsupported by substantial evidence or erroneous as a matter of law.'" Pagan v. NYNEX Pension Plan, 52 F.3d at 442.
See also, e.g., Bowman v. Arkansas-Best, 419 U.S. at 255, 95 S.Ct. at 442; Jiras v. Pension Plan, 1997 WL 639243 at *5; Maida v. Life Ins. Co., 949 F. Supp. at 1091; Crean v. New York City Dist. Council, 1996 WL 389248 at *5.
Accord, e.g., Kinstler v. First Reliance Standard Life Ins. Co., 181 F.3d at 249; Miller v. United Welfare Fund, 72 F.3d 1066, Jiras v. Pension Plan, 1997 WL 639243 at *5; Maida v. Life Ins. Co., 949 F. Supp. at 1091; Cream v. New York City Dist. Council, 1996 WL 389248 at *5.
The Second Circuit has "recognized that magic words such as `discretion' and `deference' may not be absolutely necessary to avoid a [de novo] standard of review," while noting "that the use of such words is certainly helpful in deciding the issue. When [the Second Circuit has] deemed the arbitrary and capricious standard applicable, the policy language reserving discretion has been clear," such as where "the plan explicitly provided that the trustees had authority to `resolve all disputes and ambiguities relating to the interpretation of the Plan.'" Kinstler v. First Reliance, 181 F.3d at 251 (internal quotation marks citations omitted).
B. Application of the Review Standard to This Pension Plan Application of the Review Standard to This Pension Plan
Here, the Plan gives the Plan Administrator the duty and power "to construe and interpret the provisions of the Plan and supply any omissions in accordance with the intent of the Plan," and, most importantly, provides that any such determination "shall be conclusive and binding on all parties." (Stip. Ex. A: Pension Plan § 9.2(f), (j).) That latter phrase is more than sufficient to trigger the deferential "arbitrary and capricious" standard. See, e.g., O'Shea v. First Manhattan Co. Thrift Plan Trust, 55 F.3d 109, 112 (2d Cir. 1995) (arbitrary and capricious standard applies to Plan that provided that the "Trustees shall determine any questions arising in the administration, interpretation, and application of the Plan, which determination shall be binding and conclusive"); Pagan v. NYNEX Pension Plan, 52 F.3d at 441-42; Jordan v. Retirement Committee, 46 F.3d 1264,1267-71 (2d Cir. 1995); Yoran v. Bronx-Lebanon Hosp. Ctr., 96 Civ. 2179, 1999 WL 378350 at *8-9 (S.D.N.Y. June 10, 1999); Jiras v. Pension Plan, 1997 WL 639243 at *6; Crean v. New York City Dist. Council, 1996 WL 389248 at *5; Mirto v. Amalgamated Retail Ins. Fund, 882 F. Supp. 1386, 1389 (S.D.N.Y. 1995). Jo Ann Bica does not challenge that this Plan gives discretion to the Plan Administrator; rather, she contends that the de novo standard applies here because the "Plan Administrator did not exercise such discretion, since it asked the Court to decide this matter." (Jo Ann Bica Br. at 7.) The Plan Administrator, in consultation with the Plan's counsel, explained in two letters the Plan's interpretation and decision that the daughters, and not the second wife, were entitled to the disputed 50% of benefits. (See Stip. Exs. C-D, quoted and discussed at pages 3-6 above.) In addition, the Plan Administrator revised the Plan's language as a result of this dispute to avoid the potential for ambiguity, and that revision was "in line with the determination" made by the Plan's Administrator and counsel in connection with this case. (Cohen Dep. at 25-27.) Finally, at his deposition the Plan Administrator reiterated that he stood by his earlier interpretation as to the daughters' entitlement. (Cohen Dep. at 14, 27.) Thus, there is no doubt as to the Plan Administrator's determination. The fact that the Plan acted conservatively and brought an interpleader action to avoid any potential for double liability, instead of waiting for the stepmother to sue, should not, and does not, deprive the Administrator of the benefit of the arbitrary and capricious review standard.
At oral argument, the Court asked Jo Ann Bica's counsel to provide a case to support the proposition that filing an interpleader action deprives the Administrator of the arbitrary and capricious review standard. Counsel did not do so nor has the Court's research found any such authority.
The Plan Administrator's interpretation of the Plan here is not arbitrary and capricious. Indeed, as discussed in Point II, even under a de novo review standard, the daughters are entitled to the disputed benefit.
II. INTERPRETING THE PLAN AS A WHOLE, THE DAUGHTERS ARE ENTITLED TO THE DISPUTED BENEFIT AMOUNT
The Plan provides that the normal form of pension benefit is a joint and survivor monthly annuity to the Participant and then to the Surviving Spouse. (Stip. Ex. A: Pension Plan § 7.2(b).) In essence, half of the benefits are payable to the Participant and half to the Surviving Spouse. (Id.; see also Stip. Exs. C-D.)
Where, as here, the Participant dies before he begins receiving benefits, his designated beneficiary receives the Participant's share of pension benefits (i.e., 50%) (Pension Plan § 5.9(a)), while the Surviving Spouse continues to receive her portion (the other 50%) pursuant to § 5.10(a). Section 5.10 provides that where a Participant dies before receiving benefits and has a Surviving Spouse, the Surviving Spouse receives a monthly benefit for life. (Id. § 5.10(a), 1st ¶.) In other words, the designated beneficiary receives half the pension and the Surviving Spouse receives half. (Id. §§ 5.09(a), 5.10(a), 7.2(b).) The second paragraph of § 5.10(a) then provides that the Surviving Spouse can receive a single sum payment. (Id. § 5.10(a), 2nd ¶.) In the Court's view (which is also the conclusion reached by the Plan Administrator), the purpose of the second paragraph of § 5.10(a) is to allow the Surviving Spouse to obtain her benefit in a lump sum single payment instead of the monthly payments for life called for by the first paragraph of § 5.10(a); it is not to allow the Surviving Spouse to elect to obtain not only her share but also the beneficiary's share of the pension. Jo Ann Bica's interpretation would allow a Surviving Spouse to get all of the pension benefits and thus deprive the beneficiary of any benefit. (See, e.g., Jo Ann Bica Br. at 3-7.) Such an interpretation would make naming a beneficiary a useless act for any Participant who dies leaving a Surviving Spouse, and would render § 5.9 meaningless. It also would lead to another absurd result. If the Surviving Spouse wanted monthly payments, she would receive only half the Participant's pension benefits (under § 5.10(a), 1st ¶), but if she elected a single, lump-sum payment she would receive 100% of the Participant's benefit (under § 5.10(a), 2nd paragraph). Such an interpretation makes no sense. A court should interpret a Pension Plan so as to give meaning to all its terms; where one interpretation renders a provision meaningless and another gives meaning to all provisions of the Plan, the latter interpretation should be utilized. See, e.g., Aramony v. United Way, 96 Civ. 3962, 1997 WL 732447 at *5 (S.D.N.Y. Nov. 24, 1997) ("the provisions of an ERISA plan should be construed so as to render all provisions meaningful"); Black v. Bresee's Oneonta Dep't Store Inc. Sec. Plan, 919 F. Supp. 597, 603 (N.D.N.Y. 1996); Carr v. First Nationwide Bank, 816 F. Supp. 1476, 1493 (N.D.Cal. 1994). Section 5.10(a)'s second paragraph should not be given the meaning proposed by Jo Ann Bica.
At oral argument, Jo Ann Bica's counsel was unable to supply any reason why a spouse given the choice of half or all of a benefit would choose only half.
If a Plan Participant wants his wife to receive 100% of his benefits on his death, he has merely to name his wife as his beneficiary. Joseph Bica did not do so here; rather, he named his daughters as beneficiaries and did not change the beneficiary designation when he married Jo Ann Bica.
Thus, not only is the Plan Administrator's interpretation of the Plan not arbitrary and capricious, it is the interpretation reached by the Court on de novo review.
CONCLUSION
The Court grants summary judgment to defendants Karen Bica and Maureen Quinn and denies the cross-motion for summary judgment of defendant Jo Ann Bica. On notice, by April 12, 2000, the parties are to settle the form of judgment releasing the funds from the Court's Registry to Karen Bica and Maureen Quinn.
SO ORDERED.
Copies to:
Stephen Wagner, Esq. Richard L. Strouse, Esq. Steven Bracco, Esq. Bernard Weinreb, Esq.