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Lee v. California Butchers' Pension Trust Fund, 154 F3d 1075 (9th Cir 1998): A pension fund can violate ERISA and the Age Discrimination in Employment Act (ADEA) by underpaying a pension. The Internal Revenue Code provision that requires pension funds to distribute pension movies to participants who reach the age of 70 is intended only to limit the tax shelter and require the payment of taxes on pension money. It does not require individuals to retire, and it does not authorize a fund to "deem" a participant retired when that participant continues to work. Where a plan amendment increases benefits for participants who retire after a certain date, a pension
fund cannot, in the absence of plan language that authorizes it, deprive participants of the increase by deeming them retired because they had already reached age 70 and were receiving pension benefit Where a pension fund's trustees thwart the procedures for review by failing to adhere to the plan's deadlines and ERISA's requirements for adequate notice and opportunity for review by failing to provide the specific bases for denial with reference to plan terms, a participant is relieved from any requirement to exhaust those internal appeal procedures. A fund will not be protected from an award of attorney fees because it acted in good faith.
Frank Lee (Lee) worked as a butcher at Safeway for 30 years until he retired in 1992 at 73 years of age. His pension was accumulated and paid by the California Butchers' Pension Trust Fund (the fund), which was established by several employers and several labor unions and is managed by their designees. Lee wanted to be paid on the basis that he had worked 30 years and retired in 1992 because that is what he did. The fund insisted on paying him as if he had retired in 1990 and then started working again because of the Internal Revenue Code (IRC) provision that requires pension plans to begin distributing benefits when participants reach age 70 even if they are still working. As a result, the fund paid Lee $815.50 per month instead of $1,498.20 per month.
The fund started paying Lee his pension in 1990 when he turned 70, but a collective bargaining agreement increased pensions...