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Overby v. National Association of Letter Carriers

February 27, 2009

HALLINE OVERBY, ET AL. PLAINTIFFS,
v.
NATIONAL ASSOCIATION OF LETTER CARRIERS, ET AL. DEFENDANTS.



The opinion of the court was delivered by: Rosemary M. Collyer United States District Judge

MEMORANDUM OPINION

This is an action arising under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. Halline Overby was a letter carrier with the United States Postal Service and then an officer of the National Association of Letter Carriers ("NALC") until his retirement in February 1991. He and his wife Pauline sue NALC, the NALC Annuity Trust Fund ("ATF" or "Fund"), and the Fund's trustees because the Fund has denied that Mrs. Overby is eligible for a survivor's benefit upon Mr. Overby's death. The Overbys married four months after Mr. Overby retired and have now been married for over 17 years. The Fund insists, however, that the rule for eligibility -- which used to be that a spouse had to be married to an annuitant for at least one year before the annuitant's death -- was changed in 1985 to require that a spouse be married to an annuitant before retirement to be eligible for a survivor's benefit. The Court finds that the Fund's trustees never properly amended the ATF to drop a survivor's benefit for a spouse married to an annuitant for at least one year at the time of the annuitant's death, that such a benefit accrued to the Overbys, and that Mrs. Overby is entitled to a survivor benefit upon Mr. Overby's death.

I. FINDINGS OF FACT

The Court held a three-day bench trial in this case on June 11, 12, and 16, 2008.*fn1 From the entirety of the record, including the demeanor and credibility of the live witnesses and the credibility of witnesses otherwise presented, the Court makes the following findings of fact.

1. NALC is a national labor union which represents city delivery carriers employed by the United States Postal Service. NALC sponsors a retirement plan called the ATF. The ATF covers NALC's national officers, national business agents, certain branch officers, headquarters employees, and employees of NALC's Health Plan, but not postal carriers. Pls.' Ex. 27 at P 130. At the end of 2004, the Fund had approximately 581 active participants and 376 annuitants. Joint Pretrial Statement [Dkt. # 24] at 1-2.

2. The President of NALC serves as Plan Administrator for the ATF. Pls.' Ex. 56 at P 424; Pls.' Ex. 57 at P 74. The Board of Trustees of NALC has oversight responsibilities for the union, the ATF, the NALC Health Benefit Program, and the NALC Life Insurance Program. Pls.' Ex. 55 at 41. There are three trustees on the Board of Trustees, who are elected by union members. The union also is governed by a 28-member Executive Council, consisting of the three trustees, national officers and national business agents. Pls.' Ex. 55 at 42.

3. It is undisputed that the plan document which governs the ATF allows the Board of Trustees to adopt amendments to the plan but any proposed amendment must first be evaluated by the ATF's actuaries and, after adoption by the Board of Trustees, must then be approved by the NALC Executive Council. Pls.' Ex. 1 at P 92.

A. The Survivor Annuity Provided by the ATF

1. One of the benefits offered by the ATF is a benefit to a surviving spouse equal to 60% of the participant's accrued benefit. Pls.' Ex. 1 at P 87.

2. The parties agree that under the ATF in effect at least until May 15, 1985, the surviving spouse was the "one to whom the Annuitant was married for at least one year immediately preceding the Annuitant's death, or is the parent of issue by such marriage." Pls.' Ex. 1 at P 87. This is termed the "one-year-at-death" rule.

3. Although they dispute the legality of the change, the parties do not dispute that at some time between 1985 and 1989, the ATF was changed to provide for different eligibility requirements. Article V, Section 1(b) of the Fund now states:

Upon death of an Annuitant, the surviving spouse (if any) is eligible for an Annuity of 60% of the Annuity being paid to the Annuitant at the time of death, provided that the spouse is one to whom the Annuitant was married for at least the year immediately preceding and ending on the Annuitant's annuity commencement date, or is the parent of issue by such marriage. Notwithstanding the foregoing, if the Annuitant and the spouse were married within the year before the annuity commencement date and were married for at least one year ending on or before the Annuitant's death, that spouse shall be paid the Survivor Annuity as if the spouse and the Annuitant had been married for the year ending on the annuity commencement date.

Pls.' Ex. 16 at NALC 34. This provision is termed the "marriage-at-commencement" rule.

4. Since the Overbys married four months after Mr. Overby commenced receiving an ATF annuity, Mrs. Overby would be eligible for a survivor's benefit only under the "one-year-at-death" rule, which the Defendants insist has not been in effect since 1985.

B. The Overbys and the Denial of Survivor Benefits to Mrs. Overby

1. Halline Overby was born in 1920 and became a letter carrier in 1960. Tr. I, 14-15. He was elected president of his local union in 1969 and was elected to NALC's Board of Trustees in 1978. Tr. I, 16-17. Mr. Overby served as a trustee until 1981 and was Chairman of the Board of Trustees in his final year. Joint Pretrial Statement at 33 (Stipulations), ¶ 1.

2. In April 1981, Mr. Overby was appointed Assistant Secretary-Treasurer of NALC, was elected to that office in 1982, and continued in that capacity until 1990. Tr. I, 19-20. As a national officer, Mr. Overby worked at NALC headquarters in Washington, D.C., from 1982 until 1990. Tr. I, 20. First as a trustee and then as a national officer, Mr. Overby served on the NALC Executive Council from 1978 to 1990. Tr. I, 48. First as a trustee and then as a national officer, Mr. Overby was a participant in the ATF from 1978 until his retirement. Tr. I, 18-19.

3. The Overbys met in 1980 and began to live together in 1982. Tr. I, 84-85. Mrs. Overby began working for the NALC Health Plan in October 1982 and remains in that position to this day; as such, she is a participant in the ATF. Tr. I, 84. The Overbys were married on May 30, 1991, almost four months after Mr. Overby's retirement. Tr. I, 85-86.

4. On May 1,1986, Mr. Overby suffered a stroke. Tr. I, 85. Although he achieved a substantial recovery through therapy, he continued to have problems with speech and mobility. Tr. I, 22-23. As a result, Mr. Overby did not seek re-election to his position as Assistant Secretary Treasurer in 1990 and his term of office ended in December of that year. Tr. I, 23, 86.

5. As an ATF annuitant, Mr. Overby receives a monthly benefit of $2,936. Pls.' Ex. 20. Payment of this benefit commenced on February 1, ...


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