Court Tosses Participant's Claims For Benefits

May 12, 2004 ( - A participant of a pension plan that was taken over by the nation's private pension insurer and in a long-term disability (LTD) plan terminated due to the company's bankruptcy proceedings has no standing to sue the employer.

>In granting the employer’s motion for summary judgment, the U.S. District Court for the District of Wyoming told the plaintiff he had no remedies under the Employee Retirement Income Security Act (ERISA) to pursue his claims for LTD.   Further, the participant could not pursue his claims under the language of the plan, due to the plan’s documents that clearly state LTD benefits were not vested, rather they would end should the employer terminate the plan.

“ERISA does not permit a participant’s suit against any entity … for benefits greater than what the plan itself allows,” wrote U.S. District Judge Alan Johnson.

As for the participant’s claims for pension benefits, the court said the plaintiff must apply to the Pension Benefit Guaranty Corporation (PBGC) for benefits, since the PBGC took over the plan.

Case History

Gary Conkin was a terminal manager for Consolidated Freightways Corp in Casper, Wyoming until December 1988 when he became disabled due to a work-related injury.   At the time, CFCD was a wholly owned subsidiary of holding company Consolidated Freightways Inc. (CFI).   Under provisions of the LTD plan, CFI reserved the right to amend or terminate its LTD plan, considered a “welfare benefits plan,” even if the participant were totally disabled.

In 1996, Consolidated Freightways Corp (CFC) became the new parent company of CFCD and CFCD was spun off to the shareholders of CFI, which was renamed CNF Transportation Inc. and later renamed CNF Inc. In conjunction with the spin-off , the employee benefit plans were separated.   The new parent company then established a new pension and welfare benefit plans for its current and former employees. Conkin participated in this new plan, and no longer participated in the CFI plans.

The CFC welfare benefits plan was terminated during CFC bankruptcy proceedings in 2002. PBGC took over the CFC pension plan in April 2003, terminated it, and began paying pension benefits under the PBGC insurance provisions.

The case isConkinv. CNF Transportation Inc., District of Wyoming, Number 03-CV-1058-J.