David Day v. At&t Disability Income Plan ( 2012 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
DAVID DAY,  No. 10-16479
Plaintiff-Appellant, D.C. No.
v. 5:06-cv-01740-JW
AT&T DISABILITY INCOME PLAN, ORDER
Defendant-Appellee. AMENDING
OPINION AND
 DENYING
PETITION FOR
REHEARING AND
PETITION FOR
REHEARING EN
BANC AND
AMENDED
 OPINION
Appeal from the United States District Court
for the Northern District of California
James Ware, Chief District Judge, Presiding
Argued and Submitted
August 30, 2011—San Francisco, California
Filed July 3, 2012
Amended November 1, 2012
Before: Raymond C. Fisher and Johnnie B. Rawlinson,
Circuit Judges, and Robert J. Timlin, District Judge.*
Opinion by Judge Fisher
*The Honorable Robert J. Timlin, Senior United States District Judge
for the Central District of California, sitting by designation.
13039
13042 DAY v. AT&T DISABILITY INCOME PLAN
COUNSEL
Robert Nichols, San Jose, California, for the appellant.
Stephen H. Harris (argued), Caroline L. Elkin and Melinda A.
Gordon, Paul, Hastings, Janofsky and Walker LLP, Los
Angeles, California, for the appellee.
ORDER
The opinion filed July 3, 2012, and reported at 685 F.3d
848, is amended as follows:
At slip opinion page 7859 n.6, 685 F.3d at 857 n.6, replace
the sentence with .
DAY v. AT&T DISABILITY INCOME PLAN 13043
With this amendment, the panel has voted to deny Appel-
lant’s petition for panel rehearing. Judges Fisher and Rawlin-
son have voted to deny the petition for rehearing en banc and
Judge Timlin so recommends.
The full court has been advised of the petition for rehearing
en banc and no active judge has requested a vote on whether
to rehear the matter en banc. Fed. R. App. P. 35.
Appellant’s petition for panel rehearing and rehearing en
banc, filed August 17, 2012, is DENIED.
No future petitions for rehearing or rehearing en banc will
be entertained.
OPINION
FISHER, Circuit Judge:
David Day, an ERISA plan beneficiary, elected to roll over
his pension benefits into an individual retirement account
(IRA) upon separation from his employer, AT&T. Exercising
its discretion, the plan’s claims administrator construed Day’s
lump sum rollover as the equivalent of his having “received”
his pension benefits and, according to the terms of AT&T’s
Disability Income Benefit Plan, reduced Day’s long-term dis-
ability (LTD) benefits by the amount of the rollover. Day
argues that having his pension payout deposited directly into
an IRA subject to tax penalties for early withdrawals meant
he did not actually receive the funds, an interpretation that
finds support in Blankenship v. Liberty Life Assurance Co. of
Boston, 486 F.3d 620, 624-25 (9th Cir. 2007). Reviewing the
claims administrator’s decision for an abuse of discretion,
however, we must defer to the administrator’s reasonable
interpretation of the plan. We also reject Day’s further conten-
tions that AT&T failed to sufficiently disclose the possibility
13044 DAY v. AT&T DISABILITY INCOME PLAN
that his LTD benefits would be reduced by his receipt of pen-
sion benefits, and that the administrator’s actions violate the
Age Discrimination in Employment Act (ADEA). Accord-
ingly, we affirm the judgment of the district court.
I. Background
David Day began working for Pacific Bell Telephone Com-
pany, a subsidiary of AT&T Inc., in 2000. As an AT&T
employee, he participated in the AT&T Pension Benefit Plan
and the AT&T Disability Income Plan (the “Plan”).1 In Febru-
ary 2005, he stopped working because of a disability. He
began receiving LTD benefits under the Plan, and for reasons
not relevant here, AT&T terminated Day’s employment in
August 2005.
In October 2005, Day chose to roll over his pension bene-
fits into an IRA. In accordance with his election, the AT&T
Pension Benefit Plan administrator sent Day a check in the
lump sum amount of $17,203.93, payable to the trustee of his
IRA.
In August 2008, Sedgwick Claims Management, Inc.
(Sedgwick), the Plan’s claims administrator, determined that
Day’s LTD benefits would be reduced by the amount of the
rollover. The Plan provided that LTD benefits would be “re-
duced by . . . pension benefits you may receive from any SBC
company pension plan” (emphasis added). The Plan stated:
If you are eligible and apply for pension benefits
(including a Disability Pension, if applicable), your
pension benefit, to the extent paid to you, will be
subtracted from your LTD payments. (If you elect a
cashout, the equivalent monthly amount will be cal-
1
When Day filed this action he was employed by SBC. SBC subse-
quently acquired AT&T. The parties do not dispute that SBC and AT&T
are the same entity for purposes of this lawsuit.
DAY v. AT&T DISABILITY INCOME PLAN 13045
culated and used as the factor for integration with
LTD payments.) If you are eligible but elect to defer
applying for any applicable pension benefit, your
LTD payments will not be reduced by any pension
benefits you are entitled to until such time as you
apply for and are actually paid the pension benefit.
(Emphasis added.) Relying on these provisions, Sedgwick
concluded that Day had received his pension benefits and
reduced pro rata Day’s LTD monthly benefits by $74.71,
resulting in a net benefit of $1,767.39 per month.
Day protested that his LTD benefits should not have been
reduced because he had neither “received” nor been “actually
paid” the pension benefits. Rather, they had been deposited
directly into his IRA, which imposed restrictions on his access
to the funds, including substantial penalties for early with-
drawals. Sedgwick interpreted the Plan differently.2 In Sedg-
wick’s view:
By electing to have his pension benefit paid from the
pension plan, Mr. Day “received” his pension benefit
for purposes of determining his disability benefit.
Once outside of the pension plan, the proceeds were
no longer subject to the rules of the pension plan.
Indeed, although held by a trustee, the economic
reality is that the proceeds were under the full
dominion and control of Mr. Day, to be invested as
Mr. Day saw fit, and to be paid out to Mr. Day at
times and in amounts as determined by Mr. Day in
his sole discretion and utterly unfettered by any of
the rules or requirements of the pension plan from
which they had come. Mr. Day most certainly had
“received” his pension benefit.
2
Sedgwick explained its reasons in February and October 2009 letters
to Day.
13046 DAY v. AT&T DISABILITY INCOME PLAN
(Emphasis added.) Sedgwick also “interpret[ed] the election
to take the benefits from the Pension Plan as having been
actually paid to the participant.” (Emphasis added.) In justify-
ing its interpretation, Sedgwick rejected Day’s reliance on
Blankenship where, in the context of a nondiscretionary plan,
we construed “receive” in the beneficiary’s favor as not
including a rollover of pension benefits into an IRA. See 486
F.3d at 624-25.
Ruling on cross motions for summary judgment, the district
court sustained Sedgwick’s interpretation. The court con-
cluded that Sedgwick’s interpretation of the Plan was entitled
to deference because “the Plan language unambiguously
imparts full discretionary authority on the Plan Administrator
to interpret the provisions of the Plan and to make eligibility
determinations as needed.” The court rejected Day’s argu-
ments for applying a lesser standard of review. Reviewing for
an abuse of discretion, the court concluded that it was “not
unreasonable to interpret the Plan to include [Day’s] rollover
within the ambit of ‘pension benefits [the participant] may
receive,’ ” and affirmed Sedgwick’s decision to reduce Day’s
benefits by the amount of the rollover.
The district court entered judgment in favor of the Plan,
and Day timely appealed. We have jurisdiction under 28
U.S.C. § 1291, and we affirm.
II. Interpretation of the Plan Under ERISA
A. The District Court Properly Reviewed for Abuse of
Discretion
Day first challenges the district court’s ruling that Sedg-
wick’s interpretation of the Plan is reviewed for an abuse of
discretion. Although Day concedes that the Plan conferred
discretion on Sedgwick as claims administrator, he maintains
that because Sedgwick was (1) biased or conflicted; (2) pro-
vided inconsistent reasoning for its denial; and (3) engaged in
DAY v. AT&T DISABILITY INCOME PLAN 13047
procedural misconduct, heightened or de novo review is
required. We review this question de novo. See Abatie v. Alta
Health & Life Ins. Co., 458 F.3d 955, 962 (9th Cir. 2006) (en
banc) (“We review de novo a district court’s choice and appli-
cation of the standard of review to decisions by fiduciaries in
ERISA cases” and “review for clear error the underlying find-
ings of fact.”); see also Pannebecker v. Liberty Life Assur-
ance Co. of Boston, 542 F.3d 1213, 1217 (9th Cir. 2008).
Because the Plan conferred full discretion on Sedgwick,
unless Day’s allegations of bias and misconduct are both true
and warrant less deference, the district court correctly
reviewed for an abuse of discretion. See Abatie, 458 F.3d at
967 (holding abuse of discretion review is required whenever
an ERISA plan grants discretion to the plan administrator, but
such review is informed by any conflict of interest appearing
in the record). The district court did not err in finding no
inherent or structural conflict of interest. The Plan is funded
by AT&T and not Sedgwick, and administered by Sedgwick
and not AT&T. See Abatie, 458 F.3d at 967 (a reviewing
court must always consider the “inherent conflict that exists
when a plan administrator both administers the plan and funds
it”). Nor did the court err in rejecting Day’s allegations of
actual conflict of interest. Just because Sedgwick consulted
with AT&T in responding to Day’s concerns about his rolled
over pension benefits being received by the IRA does not
show that AT&T had any influence over Sedgwick’s decision
making process in this regard.
Day’s remaining contentions are likewise without founda-
tion. Although he is correct that we generally apply de novo
review when an administrator engages in “wholesale and fla-
grant violations of the procedural requirement of ERISA,” id.
at 971, and thus “fails to exercise discretion[,]” id. at 972,
Day failed to present material or probative evidence in sup-
port of these bold assertions. At best he showed only that
Sedgwick in its February 2009 and October 2009 letters elab-
orated on its initial reasons for rejecting his appeal, and that
13048 DAY v. AT&T DISABILITY INCOME PLAN
AT&T failed to provide him with copies of various docu-
ments that he was instead required to obtain from a separate
AT&T office. Cf. id. at 972 (“[W]hen a plan administrator’s
actions fall so far outside the strictures of ERISA that it can-
not be said that the administrator exercised the discretion that
ERISA and the ERISA plan grant, no deference is warrant-
ed.”). In sum, the district court correctly rejected Day’s alle-
gations of misconduct by the claims administrator and
properly reviewed for abuse of discretion. See Abatie, 458
F.3d at 967.
B. Sedgwick Did Not Abuse Its Discretion in
Interpreting the Plan
Under the deferential abuse of discretion standard of
review, “the plan administrator’s interpretation of the plan
‘will not be disturbed if reasonable.’ ” Conkright v. From-
mert, 130 S. Ct. 1640, 1651 (2010) (quoting Firestone Tire &
Rubber Co. v. Bruch, 489 U.S. 101, 111 (1989)). “ERISA
plan administrators ‘abuse their discretion if they render deci-
sions without any explanation, . . . construe provisions of the
plan in a way that conflicts with the plain language of the
plan’ ” or “rel[y] on clearly erroneous findings of fact.” Taft
v. Equitable Life Assurance Soc’y, 9 F.3d 1469, 1472-73 (9th
Cir. 1994) (quoting Eley v. Boeing Co., 945 F.2d 276, 279
(9th Cir. 1991)), abrogated on other grounds by Abatie, 458
F.3d at 973. Applying these criteria, we hold that Sedgwick
did not abuse its discretion.
Day’s chief arguments are that the Plan language prohibited
the offset of the pension plan benefits against the LTD bene-
fits, as applied by Sedgwick, and that Blankenship barred the
offset. We disagree.
[1] We begin with the relevant portions of the Plan and
related documents that Sedgwick interpreted in reaching its
offset determination.3 First, the Plan benefit formula man-
3
Although Day argues that the district court erred by deferring to what
he describes as Sedgwick’s interpretation of statutory terms, Sedgwick did
DAY v. AT&T DISABILITY INCOME PLAN 13049
dated certain offsets to LTD benefits, as did the Summary
Plan Description (SPD). The Plan’s offset provision (section
4.2) was set forth in a section entitled “Benefits from Other
Sources” and stated:
In addition to those listed in the applicable SPD,
other benefits that reduce Benefits paid under the
Plan include all benefits for which the Employee
would be eligible if he applied for them, whether or
not he actually receives them.
(Emphasis added.) The SPD stated:
The plan provides you with an LTD benefit . . .
reduced by . . . pension benefits you may receive
from any SBC company pension plan . . . .
...
If you are eligible and apply for pension benefits
(including a Disability Pension, if applicable), your
pension benefit, to the extent paid to you, will be
subtracted from your LTD payments. (If you elect a
cashout, the equivalent monthly amount will be cal-
culated and used as the factor for integration with
LTD payments.) If you are eligible but elect to defer
applying for any applicable pension benefit, your
LTD payments will not be reduced by any pension
benefits you are entitled to until such time as you
apply for and are actually paid the pension benefit.
not engage in statutory interpretation, nor does Day cite any authority in
support of his contention that Sedgwick was required to look beyond the
Plan to the ADEA’s definition of such terms as “receive” and “paid.”
Moreover, even assuming Sedgwick was required to look to the ADEA,
Day fails to explain why interpreting the statute would result in an under-
standing of “receive” or “paid” substantially different from that arrived at
by Sedgwick in interpreting the Plan.
13050 DAY v. AT&T DISABILITY INCOME PLAN
Accordingly, the Plan and SPD provide that Day’s LTD bene-
fits would be offset by any pension benefit: (i) for which he
elected a cashout (“If you elect a cashout, the equivalent
monthly amount will be calculated and used as the [offset]
factor”); (ii) for which he was paid (“your pension benefit, to
the extent paid to you, will be subtracted from your LTD pay-
ments”); or (iii) which he received (“[your] LTD benefit [will
be] . . . reduced by benefits you may receive from . . . any
SBC company pension plan”).
[2] Sedgwick’s conclusion that Day received his pension
benefits when he rolled them into an IRA was not an unrea-
sonable interpretation. To “receive” means to “take into pos-
session or control.” Blankenship, 486 F.3d at 624-25; see
American Heritage Dictionary 1467 (5th ed.) (defining “re-
ceive” as “[t]o take or acquire (something given or offered)”).
When a beneficiary rolls a pension into an IRA, he may not
take possession of it, but he has control over the assets. For
instance, he can choose the IRA and change it; and he can
withdraw funds from it, albeit perhaps having to pay penalties
for early withdrawal. It is therefore not unreasonable to say
that he has received these benefits.
Day contends this conclusion is in conflict with Blanken-
ship. It is not, because our holding there is plainly distinguish-
able. We determined that a plan providing for an offset for
pension benefits received by a beneficiary was ambiguous,
because “receive” can mean either possession or control. See
Blankenship, 486 F.3d at 624-25. Reviewing de novo and
applying the doctrine of contra proferentem (“ambiguities are
to be construed unfavorably to the drafter” Black’s Law Dic-
tionary 377 (9th ed. 2009)), we construed the ambiguity
against the Plan and held that “receive” referred to funds actu-
ally coming into the possession of a beneficiary. See Blanken-
ship, 486 F.3d at 625. Therefore, funds rolled over to an IRA
were not to be used to offset disability benefits. See id. at 627.
DAY v. AT&T DISABILITY INCOME PLAN 13051
[3] In rejecting Blankenship as controlling, Sedgwick cor-
rectly explained to Day that the case by its own terms does
not apply here. As we acknowledged, contra proferentem
applies when a plan does not grant a plan administrator dis-
cretion to interpret ambiguous plan terms; the doctrine does
not apply when a plan “grants the administrator discretion to
construe its terms.” Id. at 625.4 In the latter context, it is the
administrator who resolves ambiguities in the plan’s lan-
guage. See Winters v. Costco Wholesale Corp., 49 F.3d 550,
554 (9th Cir. 1995) (so holding). Because Sedgwick had dis-
cretion to interpret the Plan, the only question is whether
Sedgwick’s interpretation of “receive” to include Day’s con-
trol of his IRA funds was unreasonable. See Conkright, 130
S. Ct. at 1651. It was not. The administrator therefore did not
act unreasonably in concluding that Day had received pension
benefits, and appropriately reduced his LTD benefits to
account for the rollover.
III. AT&T’s Duty to Disclose
[4] Day faults AT&T for failing to disclose to him the dis-
advantages of choosing the IRA option, particularly its effect
on his LTD benefit payments. Upon termination of his
employment, Day had several options for his pension. Appar-
ently unaware of these consequences, he chose the IRA rol-
lover not knowing that this seemingly insignificant election
could cost him $17,000 in disability benefits to which he was
otherwise entitled. Day concedes that AT&T did nothing to
compel him into making this election, nor did it give him any
false information regarding his choices. But he contends that
AT&T breached its statutory and common law fiduciary
duties by failing to affirmatively advise him of the financial
consequences that could arise were he to elect a rollover.
Although we have some sympathy for this argument in gen-
4
We also noted that the doctrine does not apply to a “self-funded” plan.
Blankenship, 486 F.3d at 625. Sedgwick also properly invoked this excep-
tion.
13052 DAY v. AT&T DISABILITY INCOME PLAN
eral, it is not compelling here. First, Day argues that the 2002
SMAART Guide he received did not include any explanation
of the possible benefits offset and did not refer the reader to
the SPD, which contained a more in-depth description of the
offsetting policy. AT&T responds that this omission was cor-
rected in the 2005 SMAART Guide sent to all employees that
explicitly refers participants to the SPD, but Day disputes
receiving it. In any event, he does not dispute that he had
access to the SPD itself, which explained the offset policy at
some length. Thus, the undisputed evidence shows that at the
relevant times during his employment, AT&T furnished Day
with Plan documents explicitly stating that disability benefits
would be offset by pension benefits received or paid.
Second, we find no legal basis for Day’s contention that, at
the time of his separation from employment, AT&T was
under an affirmative obligation to remind Day of the offset
provisions or to advise him in particular that electing a lump
sum rollover of his pension benefits could result in a substan-
tial reduction of his LTD benefits or a tax penalty. Day relies
on cases in which employers deceived beneficiaries to evade
plan obligations. See, e.g., Varity Corp. v. Howe, 516 U.S.
489, 493-94 (1996); Farr v. U.S. W. Commc’ns, Inc., 151
F.3d 908, 911-12 (9th Cir. 1998); Griggs v. E.I. DuPont de
Nemours & Co., 237 F.3d 371, 374-76 (4th Cir. 2001).
[5] Here, by contrast, Day asserts only the failure to mail
him a reminder of information that was already contained in
the SPD, not a scheme to “deceiv[e] a plan’s beneficiaries in
order to save the employer money at the beneficiaries’
expense.” Varity, 516 U.S. at 506. It might seem a simple
matter, for example, for AT&T to have imprinted a reminder
of potential disability benefits offsets on the form Day used
to exercise his distribution option. Cf. Chappel v. Lab. Corp.
of Am., 232 F.3d 719, 726-27 (9th Cir. 2000) (holding that an
ERISA plan administrator would have breached its fiduciary
duty if it adopted a mandatory arbitration clause with a 60-day
time limit in which to demand arbitration, and gave notice of
DAY v. AT&T DISABILITY INCOME PLAN 13053
the clause and its terms only in a summary plan description
contained in an employment manual). However, such advice
would not be relevant to all users of the rollover procedure
and there is no legal requirement that such a form include
warnings of all potential consequences when plan documents
already contain that information for the employee. Cf. Farr,
151 F.3d at 915 (observing that there is no “duty to provide
Plaintiffs with individualized notice of all the ways the tax
laws would impact each of their individual distributions”).
AT&T thus did not breach its fiduciary duties by failing to
disclose information.
IV. ADEA Compliance
Finally, Day contends that offsetting LTD benefits by pen-
sion benefits violates the Age Discrimination in Employment
Act (ADEA) and runs afoul of Kalvinskas v. California Insti-
tute of Technology, 96 F.3d 1305 (9th Cir. 1996).
A. AT&T Waived Its Argument that the ADEA Does
Not Apply
[6] As a preliminary matter, we hold that AT&T waived
the argument that the ADEA does not apply as a matter of
law. The protections of the ADEA apply only to employees
at least 40 years of age. See 29 U.S.C. § 631(a). Here, AT&T
argues that Day was only 39 at the time any ADEA violation
may have occurred, so his ADEA claims fail as a matter of
law. Because AT&T raised this issue for the first time at oral
argument, we must decide whether AT&T has waived the
issue. To do so, we must first ascertain whether the ADEA’s
age requirement is jurisdictional or an element of a claim. A
jurisdictional defect can be raised at any time, and cannot be
waived, whereas an argument that the plaintiff failed to satisfy
an element of a claim does not ordinarily affect the subject
matter jurisdiction of the court, and may therefore be waived.
See Arbaugh v. Y & H Corp., 546 U.S. 500, 506-07 (2006).
13054 DAY v. AT&T DISABILITY INCOME PLAN
We recently considered a similar question in the ERISA
context. See Leeson v. Transamerica Disability Income Plan,
671 F.3d 969, 979 (9th Cir. 2012) (holding that whether a
plaintiff is a plan participant for purposes of ERISA is a sub-
stantive element of his claim, not a prerequisite for subject
matter jurisdiction). In Leeson, we explained that “the only
limitation to invoking federal court jurisdiction under
[ERISA] relates to the categories of individuals entitled to ini-
tiate a civil action in state or federal court.” Id. at 978; see
also 29 U.S.C. § 1132(a)(1)(B) (“A civil action may be
brought . . . by a participant or beneficiary . . . to recover ben-
efits due to him under the terms of his plan, to enforce his
rights under the terms of the plan, or to clarify his rights to
future benefits under the terms of the plan.”). The definition
of participant under ERISA, by contrast, “appears in a sepa-
rate provision that does not speak in jurisdictional terms or
refer in any way to the jurisdiction of the district courts.” Lee-
son, 671 F.3d at 978 (internal quotation marks omitted). It
thus “serves [only] to identify those plaintiffs who may be
entitled to relief, not to limit the authority of federal courts to
adjudicate claims under ERISA.” Id.
[7] Here, like the definition of “participant” under ERISA,
the ADEA’s age requirement appears in a separate provision
that “does not speak in jurisdictional terms.” Id. (internal quo-
tation marks omitted); see also 29 U.S.C. § 631(a) (“The pro-
hibitions in this chapter shall be limited to individuals who are
at least 40 years of age.”). Accordingly, we hold that the age
requirement does not affect this court’s subject matter juris-
diction. See Leeson, 671 F.3d at 979; see also Arbaugh, 546
U.S. at 516 (explaining that “when Congress does not rank a
statutory limitation on coverage as jurisdictional, courts
should treat the restriction as nonjurisdictional in character”).
Because AT&T failed to raise this issue during administrative
review, in the district court or in it its response brief to this
court, the age issue is waived.
DAY v. AT&T DISABILITY INCOME PLAN 13055
B. The ADEA and Kalvinskas Do Not Prohibit the
Offset
[8] Applying the ADEA, we hold that the offset does not
violate the ADEA or our decision in Kalvinskas. Kalvinskas
involved employer Caltech’s attempt to offset an employee’s
LTD benefits with monthly retirement benefits for which the
employee was eligible, but which he could not actually
receive unless he retired, which he had not yet done. See 96
F.3d at 1307. We held that such an offset violated § 4(f)(2) of
the ADEA, 29 U.S.C. § 623(f)(2), because it coerced the
employee to retire in order to receive the full value of the off-
set. See id. at 1307-08.
We also held that Caltech’s policy was not protected under
an ADEA safe harbor applicable to employers that “provide[ ]
a bona fide employee benefit plan or plans under which long-
term disability benefits received by an individual are reduced
by any pension benefits (other than those attributable to
employee contributions) . . . paid to the individual that the
individual voluntarily elects to receive,” 29 U.S.C. § 623(l)(3)
(emphasis added). See Kalvinskas, 96 F.3d at 1309-10. The
safe harbor is designed to prevent an employee from double-
dipping by receiving both disability and pension benefits at
the same time. See id. at 1309. Caltech’s plan had the effect
of forcing its employee to retire, triggering concurrent pay-
ments of disability and pension benefits, contrary to the safe
harbor’s purpose. See id. at 1309-10.
[9] The circumstances here are distinguishable. Day’s rol-
lover election was independent of any retirement decision.
Unlike Mr. Kalvinskas, under AT&T’s plan Day would have
received full LTD benefits without having to retire.5 Addition-
5
We also conclude that the district court did not err in finding that
“there is no evidence that [Day’s] election to rollover his lump-sump pen-
sion benefit into an IRA account was not fully voluntary.” See Abatie, 458
F.3d at 962.
13056 DAY v. AT&T DISABILITY INCOME PLAN
ally, Day arguably would achieve the kind of double-dipping
the ADEA safe harbor is designed to allow employers to pre-
vent. If Day’s interpretation of the Plan were correct, he
would be able to roll over his pension benefits into an IRA,
continue to receive full LTD benefits and have the option of
withdrawing from his IRA (albeit at the cost of a tax penalty),
thus circumventing the Plan’s attempt to prevent double-
dipping. We therefore hold that Sedgwick’s decision to offset
Day’s LTD benefits did not violate the ADEA or Kalvinskas.
V. Conclusion
The district court properly applied an abuse of discretion
standard of review and correctly affirmed the administrator’s
decision to offset Day’s LTD benefits by the amount of his
pension benefits distribution. Day failed to show violations of
ERISA’s notice requirements or the ADEA. The judgment of
the district court is therefore affirmed.6
AFFIRMED.
6
To the extent Day requests attorney’s fees for the time spent seeking
LTD benefits from the Plan while this case was stayed in the district court,
his request is moot because the district court recently ruled on his entitle-
ment to fees for this period. To the extent Day requests fees for time spent
pursuing summary judgment, he is not entitled to fees because he did not
achieve success on the merits.