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Helton v. AT&T, Inc., No. 11-2153

Decided: March 6, 2013

The Fourth Circuit Court of Appeals affirmed the district court’s judgment awarding Francine Helton retroactive pension plan payments for a time period where she was eligible for benefits, but was unaware that she was eligible.  Francine Helton worked for AT&T from 1980 until 1997; she left AT&T to begin a restaurant and for a period of time was on an unpaid leave of absence before finally resigning on May 30, 1997.  In August 1997, AT&T amended its pension plan and allowed certain participants to elect benefits at age fifty-five without benefit reduction; Helton was in this category and eligible to receive benefits in October 2001 when she turned fifty-five.  Two letters were mailed to plan recipients notifying them of the change, but Helton never received any communication about the change.  When Helton was approaching her sixty-fifth birthday, she contacted the pension plan about her benefits and was mailed some information.  Helton discovered, through this information, that she was eligible to receive benefits immediately even though she was not sixty-five.  Helton requested payments back-dated to when she was fifty-five but her request was denied.  Helton appealed the decision to the AT&T Employee Benefits Committee and her appeal was denied; she then filed suit under ERISA.  After a bench trial, the district court awarded her back benefits in the amount of $121,563.90 plus interest.

AT&T appealed challenging the district court’s findings of fact and conclusions of law underlying the judgment.  AT&T alleged that court erred in relying on evidence outside the administrative record; it erred in holding that AT&T’s denial of Helton’s claim was not reasonable; it should have remanded the case to AT&T for reconsideration after finding that AT&T abused its discretion in denying Helton’s claim; and it was precluded under the terms of the plan from awarding Helton retroactive benefits.  First, AT&T claimed that the court was barred from considering evidence outside the administrative record.  The Fourth Circuit distinguished the precedent relied on by AT&T and stated the proper inquiry is whether the evidence was known by the plan administrator at the time of the decision.  Second, the Fourth Circuit examined AT&T’s claim that the court erred in holding Helton’s claim was not reasonable by looking at the eight Booth factors and determined that AT&T did abuse its discretion in denying Helton’s claim.  Third, AT&T did not raise the issue of remand at trial, and therefore, this issue was reviewed under a plain error standard.  The Court concluded that because remand is not required, this did not constitute plain error or a miscarriage of justice.  Finally, the Court concluded that AT&T was not precluded from awarding retroactive benefits under the plan.  The Court also considered AT&T’s claim that the court incorrectly held that AT&T violated the reporting and disclosure requirements of ERISA by not properly notifying Helton.  Though there was conflicting evidence on this issue, the holding was properly supported by various testimony and therefore did not constitute an abuse of discretion.

Full Opinion

-Jennifer B. Routh