Francis Dupont argued that he remains a participant in the traditional Kodak Retirement Income Plan (KRIP) because he did not receive the full value of his benefit in 1999 since he was a victim of the company’s scheme to induce him to give up his participation in the traditional KRIP. However, the court found that Dupont lacks standing under ERISA as both a current and former participant.
According to the court opinion, since Dupont took his full distributions from KRIP both in 1999 and upon his retirement in 2007, he is not a current participant. In addition, the court said Dupont’s argument that Kodak concealed the fact that it may amend KRIP in the future to recognize service at other employers is based on the assumption that Kodak knew in 1999 of the possibility of a 2007 amendment; however, Dupont did not allege any facts suggesting that Kodak had such foresight and the court found the possibility too speculative to classify him as a current participant.
The court also ruled Dupont lacks standing as a former participant since he did not allege that he “ha[s] . . . a reasonable expectation of returning to covered employment” since he voluntarily retired from Kodak in 2007, and he has no “colorable claim’ to vested benefits.” Further, the court said the statute of limitations has run on his Section 502(a)(1)(B) claim challenging the value of his 1999 payment.
Finally, according to the opinion, since Dupont seeks reinstatement in the traditional KRIP in order to obtain the benefits he claims he is entitled, he is required to exhaust his administrative remedies under the plan before bringing a court action.
Dupont, began working for Eastman Kodak Co. in September 1975, and participated in the KRIP. In January 1, 1997, when part of Kodak was sold to Danka Office Imaging he became a Danka employee.
In early 1999, Dupont voluntarily resigned from Danka, and according to the January 1997 summary plan description in place at the time, he was “eligible to receive a retirement benefit immediately if [he was] a Lump-Sum Eligible Participant. Otherwise, [he was] eligible to receive a retirement income benefit payable at age 65 or as early as age 55 if [he had] at least 10 years of total service.” Dupont elected to take a lump sum distribution which amounted to $116,869 at the time of his resignation.
In retrospect, Dupont claimed he was not adequately informed about his options, specifically, contending that the January 1997 SPD did not mention the fact that Kodak might amend the KRIP terms in the future to recognize service at other employers. He also asserted that the January 1997 SPD did not mention the “potential of participants in the traditional KRIP Plan to have their retirement benefits ‘grow’ and experience an exponential increase in value in the event they terminated their employment with Kodak, but were later restored as Kodak employees since the acquisition of additional time in service as a Kodak employee would be used as a factor in calculating the retirement benefits for which they would have been eligible had they remained as participants in the traditional KRIP Plan
Dupont said he relied on Kodak’s representations made in Question and Answer documents that his participation in the KRIP would not grow since he was no longer an employee of either Kodak or Danka.
The case is Dupont v. Sklarsky, D.N.J., No. 08-1724 (JAP).
« Dismal Markets Wipe Out Five Years of Pension Gains: Milliman