Claim to recover benefits under ERISA was barred by statute of limitations

A claim to recover benefits under ERISA §502(a)(1)(B) was held to be time-barred by the U.S. Court of Appeals in St. Louis (CA-8). ERISA does not contain its own statute of limitations but borrows the limitations period from the most analogous state-law claim. In this case, it was Iowa’s ten-year statute of limitations for breach of contract. Since the lawsuit in this case was filed more than 10 years after the denial of the claim for benefits, it was barred.

In 1999, as a result of a merger of local unions, a union pension fund revised the formula for calculating the benefits of certain retired union plumbers. The revision concerned the contribution rates for its members’ past service. Some of the retirees appealed the fund’s decision to revise the benefit formula under its administrative review procedure. The appeal was denied in 2000 and no lawsuit was filed for judicial review of this denial.

In 2009, the board of trustees of a union pension fund came to realize that, for a number of years, it had been paying benefits to the retirees based on the formula in effect prior to the revision. Consequently, it reduced the monthly benefit payments to the retirees and then began to recoup the previous overpayments through withholding. The retirees appealed these actions under the fund’s review procedure. The appeals were denied on September 29, 2010.

The retirees then filed suit to recover benefits under ERISA §502(a)(1)(B). The district court held that the statute of limitations barred the retirees’ claims and the current appeal ensued.

The appellate court held that the action was time-barred. The court noted that ERISA does not contain its own statute of limitations but borrows the limitations period from the most analogous state-law claim. Here, that period was Iowa’s ten-year statute of limitations for breach of contract. The pension fund denied the retirees’ appeal of the decision to revise its benefit formula on July 14, 2000. The retirees did not file this lawsuit until February 15, 2011, more than ten years later. Accordingly, the decision of the federal district court was upheld.

Source: Pilger v. Sweeney (CA-8).

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer’s Benefits Reports.

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