||Doris Dabrowski won a critical
argument before Federal appelate court which secures greater
pension rights for employees. This important case was
reported by American Lawyer Media, The Legal
many pension rights websites and blogs, and other news sources
concerning pension rights law. A sampling of the news reports
and link to a PDF file of the court's opinion follow below:
"In a recent case, DiGiacomo
v. Teamsters Pension Trust Fund of Philadelphia and Vicinity [PDF],
the U.S. Court of Appeals for the Third Circuit ruled that if
a retiree earned the right to a pension after the private pension
law went into effect in 1976, a plan must count all the years
he was a member of the plan in figuring the amount of his pension,
including years before a break in service occurring before the
law was enacted. This ruling sided with an earlier ruling by
the Second Circuit Court of Appeals. It rejected a decision
by the Seventh Circuit that had said that pension credit
for a retiree's pre-break, pre-law years should be determined
by the rules of the plan in effect at the time of the break-in-service.
"In the DiGiacomo case, the retiree had worked
for 10½ years
under a Teamsters Pension Plan, worked elsewhere for 5 years,
and then returned to work under the plan for 18 years. The
five years when he was not working under the plan constituted
a break-in-service under the rules of the plan at the time.
Under the law at the time, plans were allowed to disregard
all employment before a break-in-service when calculating
the final retirement benefit. When DiGiacomo applied for his
benefit, the Teamsters plan claimed that he would only receive
18 years worth of benefits.
"Before the private pension law,
ERISA, was enacted, plans could disregard all years worked before
a break-in-service both for purposes of figuring whether a retiree
had earned a benefit, and how much he had earned. ERISA provided
new protections for workers who had breaks in service both for
purposes of "vesting" (earning a benefit) and "accrual" (calculating
the amount of a benefit).
"But ERISA treated breaks-in-service
that occurred before the law was passed differently for "vesting" than
for "accrual" purposes. It said that in determining
whether a retiree had earned a benefit, plans did not have
to include pre-ERISA pre-break-in-service years. But in the
provision of the law dealing with figuring the dollar amount
someone had earned, there was no mention of pre-ERISA breaks-in-service,
only a general statement that "all years" of participation
in the plan had to be counted.
"The courts that ruled in favor
of the retirees said that in ERISA 204(b)(4)(a) (29 USC Section
1054(b)(4)(a)) the law states “all years” must
be used for determining the amount of a benefit. The Seventh
Circuit, which ruled against the retirees, said that the rules
relating to earning a benefit and calculating its amount are
parallel and should be read together. The court argued that
if these laws are read as parallel, then pre-ERISA benefits
are determined purely based on what was set out in the plan.
Recently, the Supreme Court declined to hear the DiGiacomo case,
allowing the decision (to use all of the retiree's years of
work in determining the amount of his benefit) to stand."
The legal significance of this important case was described
in more detail in The Legal
Intelligencer, the daily newspaper for
the legal profession in the Philadelphia region. The article
was written by Shannon P. Duffy, and published August 29,
2005. The following is the beginning excerpt:
ERISA Bars Pension Plan's 'Break-in-Service' Exclusion
"Under ERISA, the calculation of a worker's pension benefits
cannot exclude a period of work due to a "break in service" --
even if that first stretch of work occurred before ERISA was
passed -- a divided panel of the 3rd U.S. Circuit Court of
Appeals has ruled.
"The 3rd Circuit's 27-page opinion in DiGiacomo
v. Teamsters Pension Trust Fund of Philadelphia and Vicinity sharpens
an existing split in the circuits. . . . "