In Testa v. Becker, Nos. 17-1826-cv, 17-1985-cv (2nd Cir. 2018), in 1998, defendant Xerox Corporation Retirement Income Guarantee Plan (the “Xerox Plan”) issued a Summary Plan Description explaining that it would calculate plan participants’ benefits using the so-called “phantom account offset” method. In 2006, the Second Circuit Court of Appeals (the “Court”) held in Frommert v. Conkright, 433 F.3d 254 (2d Cir. 2006), that defendant Lawrence Becker (“Becker”) could not use the phantom account offset when calculating benefits for a group of over one hundred plan participants who were hired before 1998.
Three years later, plaintiff Robert Testa (“Testa”), who was hired before 1998, learned that Becker had applied the phantom account offset to him. Testa sued Becker under ERISA for denial of benefits and breach of fiduciary duty, alleging that Testa had defied the Court’s decision in Frommert. The district court dismissed Testa’s denial-of-benefits claim as untimely but granted Testa summary judgment on his fiduciary-duty claim. Becker appealed the latter; Testa cross-appealed the former.
Upon reviewing the case, the Court concluded that Testa’s denial-of-benefits claim is untimely (the the claim was brought 12 years after it accrued, so the 6 year statute of limitations had expired), and that Becker, not Testa, was entitled to summary judgment on the fiduciary-duty claim (Frommert did not apply to participants who did not bring timely denial of benefit claims). Accordingly, the Court affirmed the judgment of the district court in part, reversed it in part, and remanded the case with directions to enter judgment for Becker and the Xerox Plan.