Participant Not Entitled To More Than Two Years Retroactive Benefits

July 1, 2004 ( - A pension disability plan does not have to pay retroactive benefits to a plan participant prior to the two years of benefits provided in the plan's language.

>Granting summary judgment on behalf of the pension plan, the US District Court for the Southern District of New York found the plan’s interpretation of its disability plan payout policy to be “rationally related to a valid plan purpose.”   In this case, the trustee of the plan had a “hard and fast rule” that a plan participant must first file an application before any benefits are paid and then benefits did not have to be paid retroactively for more than two years.

Milma Garcia Ramos, the plaintiff, had filed an application for disability benefits in July 2001, related to a fall at work that occurred five years prior.   After Ramos fell, she filed for, and was awarded, Social Security benefits.   Five years later, she filed an application with her pension fund for disability benefits, claiming after the fall she suffered from severe depression.   The trustees of the 1199 Healthcare Employees Pension Fund awarded Ramos retroactive disability benefits for two years prior to the date in which Ramos filed the application.   Ramos filed suit against the fund claiming a violation of the 29 U.S.C. Section 1001 of Employee Retirement Income Security Act (ERISA).

Ramos had argued the doctrine of equitable tolling should apply because she was suffering from a severe mental disorder.   However, the Court rejected this argument, finding the Doctrine did not apply because the two-year rule was not a limitation period at all in that “It is not an absolute bar to receiving benefits under the Plan. Rather, it is a substantive rule governing the amount of benefits payable to a Plan participant.”

The case is Ramos v. 1199 Health Care Employees Pension Fund , Southern District of New York, No. 03 Civ . 4527 (RMB )( HBP).