Full opinion text
MEMORANDUM OF DECISION [Docs. # 69, 76] ARTERTON, District Judge. Table of Contents I.Introduction 103 II. Factual background.104 A. Retiree medical benefits.105 1. Pre-1985 Retirees.105 2. Post-1985 Retirees.107 B. Medicare reimbursement.108 C. Prescription drug plan.109 III. Discussion .110 A. Summary judgment standard .110 B. Recovery of benefits due under the plans.Ill 1. Medical insurance benefits (pre-1985 retirees).112 a. The ERISA plan for pre-1985 retirees.112 b. The pre-1985 plan does not provide vested benefits.114 2. Medical insurance benefits (post-1985).115 3. Medicare premium reimbursement.116 4. Prescription drug coverage.119 5. Summary.119 C. Breach of fiduciary duty.120 1. Material misrepresentations.120 2. Representations by fiduciary.129 3. Detrimental reliance.130 D. Promissory estoppel .130 IV. Conclusion.132 I. Introduction Plaintiffs, forty-eight Pirelli Armstrong Tire Corp. retirees and their spouses, have sued their former employer, Pirelli Tire LLC (“Pirelli”) under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1132(a)(1)(B), seeking reinstatement of alleged “vested,” or non-forfeitable, retiree medical benefits that were reduced or eliminated by Pirelli on April 1, 1993 and payment of their out-of-pocket expenses for benefits withheld since 1993. Aternatively, plaintiffs claim that if they are not entitled to these benefits under the terms of their retiree benefits plan, Pirelli breached its fiduciary duty to provide them with truthful, accurate information about the plan, in violation of ERISA, 29 U.S.C. § 1132(a)(3). Plaintiffs further claim that defendant is estopped from denying benefits based on its past representations to plaintiffs and their reliance on those promises. Plaintiffs Dominic Annatone, James McElhannon, William McMunn, Alexander Monko, Jr., John Taylor, Melton Walker and Billy Young have moved for summary judgment on liability [Doc. # 76]. Defendant Pirelli has cross-moved for summary judgment [Doc. # 69], asserting that the retiree medical benefits were not vested, there was no violation of fiduciary duty under ERISA, and promissory estoppel does not apply. Mthough an employee’s medical benefits plan ordinarily can be changed during the course of retirement, a promise of non-forfeitable or vested benefits made through use of language guaranteeing that medical benefits will be provided unchanged by the company for the lifetime of a retiree is enforceable. Because a benefits plan cannot be amended through informal communications, and amendments to the plan will be considered binding only where made at the same level of formality as the plan itself, usually such a promise of vested benefits must be contained within the plan itself. However, the obligations imposed by the fiduciary relationship between the employer and the beneficiaries prohibits the employer from making material misrepresentations to beneficiaries about the terms of their benefits plan. Therefore, while informal communications cannot alter the terms of a formal ERISA plan, where a person acting in a fiduciary capacity conveys misleading or inaccurate material information to the plan beneficiaries, that conduct may give rise to liability under ERISA. This case involves the intersection of these two fundamental principles of ERISA law. It is undisputed here that plaintiffs were consistently told by Armstrong over a period of thirty years that they would have medical benefits from “womb to tomb,” and that their benefits would be the same in retirement as during employment. Moreover, the undisputed evidence presented to the Court clearly shows that when these promises were made, Armstrong and later Pirelli had every intention of continuing to offer retiree medical benefits consistent with past practice until 1993, when, faced with rising costs of medical insurance and increasing economic problems, Pirelli conditioned continuation of retiree medical insurance on retiree contribution to premiums and increased deductibles, and eliminated the prescription drug plan and the subsidy for Medicare Part B premiums. The first issue presented by these cross-motions is whether Armstrong legally obligated itself to providing these benefits for the duration of the retirees’ and their spouses’ lifetimes, or whether it retained discretion to change or terminate the benefits plans. Answering this question requires the Court to determine which documents constitute the relevant benefit plans, and whether the benefit plans contain language promising lifetime, non-for-feitable benefits. Plaintiffs’ breach of fiduciary duty and estoppel claims, in turn, require analysis of the promises or representations made by Armstrong or Pirelli to the plaintiff retirees, and whether these plaintiffs reasonably relied on those promises to their detriment. II. Factual Background The following undisputed factual description of the documents describing the benefits applicable to the plaintiffs is taken from Plaintiffs’ Statement of Undisputed Facts, Plaintiffs Local Rule 9(c)(2) Response to Defendant’s Statement of Undisputed Facts, Defendant’s Statement of Undisputed Facts, the Declaration of Sherwood Willard, and Defendant’s Local Rule 9(c)(2) Response to Plaintiffs’ Statement of Undisputed Facts. Plaintiffs and defendant agree that the governing medical benefits plan for each plaintiff is the plan that was in effect as of the date of retirement. Plaintiffs accordingly can be categorized into two classes: those who retired prior to January 1, 1985, who were not required to make any co-payment or deductible payment toward their medical insurance, and those who retired after defendant instituted the $100 single/$200 family deductible effective January 1,1985. A. Retiree medical benefits 1. Pre-1985 Retirees Plaintiff Dominic Annatone retired in 1981, James McElhannon and Billy Young retired in 1983, and Melton Walker retired in 1984. Upon retirement these four plaintiffs received medical insurance benefits with no deductible or retiree contribution until the changes in 1993. Prior to early 1981, employees were covered under two Connecticut General (“CG”) insurance policies which provided certain medical benefits to employees, including major medical coverage. The CG policies defined “employee” to “include a retired Employee who was insured under the policy on the day prior to his retirement.” In the section titled “Termination of Insurance,” those policies also provided that “[i]f an Employee’s Active Service terminates because of retirement, the insurance, other than Maternity Expense Benefits and Obstetrical Expense Benefits, will be continued, during the period the Employee remains retired, until the Policyholder ceases to pay premiums for the Employee or otherwise cancels the insurance.” A separate section titled “Discontinuation of the Policy,” provides in part that “the Policyholder may discontinue this policy as of any Premium Due Date by giving the Insurance company written notice in advance of that date.” Summary Plan Descriptions (“SPDs”) describing the terms of these CG policies were prepared by CG in 1976, following the enactment of ERISA. The first SPD, effective October 1, 1976, states that “if you retire, your Life Insurance and your Medical Care benefits will be continued until the employer stops payment of premiums for you.... The insurance for a family member terminates when your insurance terminates, or when the family member is no longer eligible, whichever happens first.” The second SPD, effective January 1, 1981, contains virtually identical language. The insurance certificate issued by CG describing these policies included retired employees within the definition of “employee” and provided that medical insurance “will be continued until the date on which the Policyholder ceases to pay premiums for the employee or otherwise cancels the insurance.” In February 1981, Armstrong converted to a self-insured arrangement under which CG administered the plan and made benefit payments from a revolving Armstrong bank account. The policy in effect at this time continued to define “employees” to include “retired employees who were insured under the policy on the day prior to his retirement.” Thus, in retirement, plaintiffs Annatone, McElhannon, Young and Walker were covered under the terms of the CG policy governing the self-insured plan. None of the CG policies or the SPDs expressly stated that medical benefits were non-forfeitable or would continue for the lifetime of the retired salaried employees. On the other hand, neither the policies or the SPDs issued during the relevant time period contained an express statement that Armstrong reserved the right to modify or terminate the plan benefits at any time. In addition to the CG policies, SPDs and the insurance certificates, Armstrong prepared Personnel Policy Directives (“PPDs”) to be used by personnel managers as a reference when advising employees about their benefits. The 1976 PPD was sent by the Vice President of Personnel and Employee Relations, G.R. Millar, to officers, directors and plant managers with an attached note stating that “Employee Relations at all locations is responsible for communicating these changes to all covered employees.” The PPDs were kept at the personnel office at each plant, and employees were permitted to take the books home to familiarize themselves with the terms of the plan. The PPD issued in 1976 provides that: Employees who are retired by the Company ... shall continue to receive the benefit described in this Policy.... The surviving spouse of an Employee who is retired by the Company on or after the effective date of this Personnel Policy Directive, provides such spouse, as of the date of death of such retired former Employee was covered for these benefits as an eligible dependent, shall continue to be eligible to receive such benefits to the earlier of the date of death or remarriage. There is no language in the 1976 PPD reserving the right to Armstrong to change or terminate benefits, except “[t]he Plan as described above may be appropriately modified where necessitated by federal or state statute or regulation.” The 1976 PPD was in effect until 1984, when Armstrong changed its benefits plan. However, additional PPDs governing retirees were promulgated during that time period. In 1980, a PPD for terminated salaried employees was issued. This PPD states that the following benefits would be provided to retirees following normal or early retirement: hospital, medical and surgical coverage; major medical plan; prescription drug plan; and life insurance coverage. If a pension-eligible employee died, his or her surviving spouse was provided with benefits “so long as they remain qualified as such.” The 1980 PPD contained no language indicating the duration of benefits. As with the 1976 PPD, there also was no reservation of Armstrong’s right to change or terminate benefits. Finally, in 1982, Armstrong issued a PPD that modified the 1980 PPD to include payments for Medicare Part B as an additional benefit to retirees. The 1982 PPD, like the 1980 PPD, made no mention of duration and had no reservation of rights. Although the benefits package for active salaried employees changed in 1984, effective January 1, 1985 for those employees who retired between January 1, 1984 and December 31, 1984, benefits for those salaried employees who had retired prior to January 1, 1984 were not changed, apart from two minor modifications to the prescription drug plan. Accordingly, salaried retirees who had retired prior to January 1, 1984 were covered under the pre-1985 Plan described above and did not receive information regarding the post-1984 changes for active employees. A certificate of insurance issued in 1988 applicable to those salaried employees who had retired before January 2, 1985 expressly provided that “[t]he Plan Administrator may change or terminate benefits under the plan and may terminate the whole plan or part of it.” 2. Post-1985 Retirees In January 1984, effective January 1, 1985 for employees who retired within this one year window, Armstrong began requiring payment of a deductible and co-payment for medical insurance under a new insurance plan called the “Family Health Program.” Plaintiffs John Taylor, Alexander Monko and William McMunn received benefits under this plan and retired during this time period. A document entitled “New Directions in Benefits II for Salaried Employees Retroactive June 21, 1984” (“New Directions II”) was distributed to salaried employees in June 1984. The New Directions II document described the new benefits package, and informed employees that “[i]t is management’s intent to continue these Plans indefinitely, but Armstrong reserves the right to change, modify or discontinue any of the Plans at any time, giving due notice to Plan participants.” The New Directions II document, unlike the earlier SPDs and CG policies, did not define “employee” to include retirees who were previously covered under the policy. However, the “Termination of benefits” section of the CG insurance certificate in effect as of January 1, 1984 states that “[i]f your Active Service ends because you retire: ... your Medical Insurance may be continued until your Employer stops paying premiums for you. See your Benefit Plan Administrator for details.” Effective May 31, 1988, a new CG policy was issued after Pirelli’s corporate predecessor bought Armstrong’s stock in 1989. Under this policy, Pirelli continued to require payment of deductibles and co-payments, and CG continued to administer the plan. The 1989 Salaried Employee Benefits Handbook issued by Pirelli describing, inter alia, the medical benefits plan, provided that “Pirelli Armstrong Tire Corporation reserves the right, at its sole discretion, to modify or terminate the plans or policies at any time.” In the Table of Contents, the Handbook lists a section entitled “Termination of Benefits” and notes that it was “to be issued at a later date.” However, no such section was ever issued. While the deductible amount increased over time from January 1, 1984 for active employees, salaried employees who retired between January 1, 1985 and January 1, 1991 were required to pay the lowest level deductible and co-payment toward the cost of their medical benefits during retirement. Plaintiff Taylor retired in 1985, and his deductible remained at the lowest level until the changes in 1993 giving rise to this lawsuit. In July 1990, facing financial problems, Pirelli determined that it had to reduce its salaried workforce by approximately 10 percent. To achieve that goal voluntarily, Pirelli offered an Optional Pension/Severance Program (“OPS”). Two of the moving plaintiffs, McMunn and Monko, retired under the OPS program in 1990. The OPS provided severance pay for participants eligible for unreduced pensions or early retirement, and credited additional age and years of service to allow other participants to qualify for unreduced pensions. The OPS plan stated that OPS retirees would receive “the normal medical, prescription drug, and life insurance benefits available to retirees.” As noted, prior to 1991, retiree medical benefits were provided at the lowest deductible payment level, and included prescription drug coverage with a one dollar co-payment. For those OPS retirees whose retirement was deferred until 1991, the OPS plan provided that “the single/family deductible under the medical plan will be $100/$200 during the individual’s retirement.” In a script prepared by Harold Hoppert, the Vice President of Human Relations, for use in presenting the OPS program to human resources personnel, he emphasized that one of the benefits of retiring under the OPS plan was to provided “added security”: As an example, there are those who have expressed concern about the revisions to the retiree medical plan deductible effective January 2, 1991. Our plan affords many of you the opportunity to act now to obtain a $100/$200 deductible during retirement and not be affected by the upcoming changes in retirement insurance, Thus, when plaintiffs Monko and McMunn retired in 1990, they were required to pay only a $100 single/$200 family deductible to receive their medical coverage. B. Medicare reimbursement Starting in January 1, 1980, Armstrong began a program by which salaried retirees were reimbursed by Armstrong for the cost of Medicare Part B premiums which the retirees paid directly to the government. No SPD or written policy was issued for the retiree Medicare reimbursement program. All moving plaintiffs were covered by this program prior to the changes in benefits in 1993. These Medicare reimbursement payments were made from general corporate funds. No exercise of discretion as to eligibility or amount was required, and payments were made if the retiree was at least 65 years old. The letter sent to retirees describing this program stated that “[i]n order to receive this benefit, it is only necessary that you complete and return the attached form to the Corporate Insurance Department along with a copy of your Medicare Part ‘B’ card(s).” The application forms sent by Armstrong dated February 1983 unambiguously state that “[pjayment of this benefit will continue during the pensioner’s lifetime. In the event of the pensioner’s death, the spouse will continue to receive benefit [sic] until his or her death or remarriage.” Similarly, the application forms sent out by Pirelli Armstrong, revised November 1989, clearly state that “[t]his benefit is payable for the lifetime of the retiree and/or spouse.” The 1984 Insurance Certificate describing the salaried employees’ group insurance states that “If you remain in active service beyond age 65, you may elect to be covered for Comprehensive Medical Benefits on the same basis as any other employee. You may elect to continue medical coverage under one of two options.... 2. You may elect not to be covered for Comprehensive Medical Benefits. Your medical benefits would be covered only from Medicare. The Armstrong Rubber Company mil reimburse you for the cost of your Medicare Part B coverage.” Further, a Personnel Policy Directive (“PPD”) effective August 1, 1982 applicable to salaried employees lists Medicare Part B premiums as one of the company-paid benefits provided to employees who leave the company through normal or early retirement. C. Prescription drug plan From 1976 through 1992, Armstrong, and then Pirelli, provided prescription drug coverage to both salaried employees and retirees, administering the coverage contractually through insurance companies. The only plan changes from 1976 through 1993 were in the deductible amount, which originally was $1.00 deductible for each prescription. The deductible was raised to $3.00 after January 1, 1985, and effective January 1, 1986, was reduced back to $1.00. These changes applied to active and retired employees. All moving plaintiffs were covered by this prescription drug plan during their retirement. In 1977, effective October 1,1976, a SPD describing this plan was filed with the Department of Labor in compliance with ERISA. The 1977 SPD provided that “[i]f you qualify for such benefits under the Retirement Plan, your Prescription Drug coverage will be continued after you retire, in accordance with the Plan. It may be possible, too, for the benefit coverage to continue on behalf of your surviving spouse and eligible dependents after your death following retirement. Complete details are available from the Employment Benefits Administrator in your local Personnel/Industrial Relations office.” The 1977 SPD contained no durational language stating that coverage would continue until the death of the retiree or for the duration of his/her retirement. In identifying the company’s responsibilities under the plan, the 1977 SPD expressly stated: “3. The Company may amend the Plan if necessary. 4. The Company may terminate the Plan; however, the Company intends to continue the Plan.” Prescription drug coverage was also identified in the 1976 PPD as a salaried retiree benefit, and both the 1984 New Directions II brochure and the 1989 Employee Benefits Handbook contain references to the prescription drug plan. As noted previously, both these documents also contained express reservations of defendant’s rights to amend or terminate the plans. III. Discussion A. Summary judgment standard A court shall grant a motion for summary judgment under Fed.R.Civ.P. 56 “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits ... show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” The moving party bears the initial burden of establishing that no genuine issue of material fact exists and that the undisputed facts show that she is entitled to judgment as a matter of law. In determining whether a genuine issue of material fact exists, a court must resolve all ambiguities and draw all reasonable inferences against the moving party. Once this initial burden has been met, the non-moving party must “go beyond the pleadings and by her own affidavits, or by the ‘depositions, answers to interrogatories, and admissions on file,’ designate ‘specific facts showing that there is a genuine issue for trial.’ ” A party seeking to defeat a summary judgment motion cannot “rely on mere speculation or conjecture as to the true nature of facts to overcome the motion.” “Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted.” On cross-motions for summary judgment “neither side is barred from asserting that there are issues of fact, sufficient to prevent the entry of judgment, as a matter of law, against it. When faced with cross-motions for summary judgment, a district court is not required to grant judgment as a matter of law for one side or the other.” “Rather, the court must evaluate each party’s motion on its own merits, taking care in each instance to draw all reasonable inferences against the party whose motion is under consideration.” B. Recovery of Benefits Due under the Plans Plaintiffs argue that by changing the medical benefits provided to salaried retirees in 1993, defendant violated ERISA, 29 U.S.C. § 1132, by improperly withholding benefits due to them under the plans described above, and that they are entitled to summary judgment on this count because the plans unambiguously created a legally vested interest in these medical benefits. Defendant counters that it is entitled to summary judgment on this claim because, as a matter of law, the plans do not create any vested rights. Under ERISA, employee welfare plans, unlike pension plans, are not required to vest, and absent any vesting term in the plans themselves, the employer may unilaterally amend or terminate a welfare plan at any time. By not statutorily requiring vesting of medical benefits, Congress has provided employers with flexibility to respond to unpredictable medical insurance needs and costs. On the other hand, if the employer promises to provide vested medical benefits, such a promise will be enforced under ERISA as a plan term. Where a plan document “unambiguously indicates whether retiree medical benefits are vested, the unambiguous language should be enforced.” The Second Circuit has held that “to reach a trier of fact, an employee does not have to point to unambiguous language to support [a] claim. It is enough [to] point to written language capable of reasonably being interpreted as creating a promise on the part of [the employer] to vest [the recipient’s] ... benefits.” In assessing whether an ERISA plan contains a vesting term, this Circuit has emphasized that extrinsic evidence such as “informal communications between an employer and plan beneficiaries” cannot amend an ERISA plan, “absent a showing tantamount to proof of fraud.” This rule gives effect to ERISA’s requirement that plans and SPDs be the primary means of informing beneficiaries and participants of their and their employer’s rights and obligations under the plans. However, where an ERISA plan is not promulgated by means of formal documents, amendments will be considered binding where made at the same level of formality as the plan itself, and informal plans are enforceable under ERISA if they meet certain criteria. Thus, employers cannot strategically avoid ERISA’s substantive requirements by failing to comply with its procedural requirements. The two questions that must be answered then to determine whether any of the moving plaintiffs can demonstrate vested rights in their retiree medical benefits are: what constitutes the relevant ERISA plan applicable to each plaintiff, and whether the terms of that plan provide for vested benefits. 1. Medical insurance benefits (pre-1985 retirees) a. The ERISA Plan for pre-1985 retirees Defendant claims that the Plan in effect for pre-1985 retirees, applicable to plaintiffs Annatone, McElhannon, Walker and Young, consists solely of the CG policies and the relevant SPDs and insurance certificates. According to the defendant, this case falls squarely within the Second Circuit’s holdings in Moore, Multifoods, and Joyce, and plaintiffs’ evidence of informal communications such as the PPDs and oral promises by human resources employees cannot be used to create a binding promise to vest medical benefits where none appears in the plan documents themselves. Relying on Moore, defendant argues that the PPDs cannot be relied on as part of the ERISA plan documents, as they were simply summaries of then-current benefits, rather than part of the formal plan. Plaintiffs, in contrast, claim that the Plan was an informal one comprised of the totality of the CG policies, the SPDs, the certificates, the PPDs and defendant’s past practice and representations, whose collective provisions demonstrate that medical benefits vested at retirement. In Moore, the company had provided information about its benefits to employees through summary plan descriptions, as well as filmstrips, materials given to managers to be used in conjuncture with the filmstrips, articles in company newsletters and letters and memos to active employees and retirees. The SPDs and the plan insurance policy contained a reservation of rights; other informal communications including the newsletters and filmstrips did not, and “occasionally described these benefits as being for the employee’s ‘lifetime,’ and ‘at no cost.’ ” The plaintiffs in Moore had argued that, despite the existence of SPDs containing an express reservation of the company’s right to amend or terminate the plan, the contract between the company and the retirees consisted of the totality of the representations and communications made by the company. The Second Circuit rejected that argument on the grounds that it “would undermine ERISA’s framework which ensures that plans be governed by written documents filed under ERISA’s reporting requirements and that SPDs, drafted in understandable language, be the primary means of informing participants and beneficiaries.” The court also observed that the filmstrips and letters containing statements suggesting vesting of benefits “did not purport to be complete binding statements of plan terms. While the use of language such as ‘lifetime’ or ‘at no cost’ might conceivably create a triable issue of fact on a contract theory, it does not constitute the type of misleading behavior that would cause us to override plan documents and SPDs created pursuant to ERISA.” Plaintiffs here make no allegation of fraud or bad faith triggering the Moore exception. Instead, plaintiffs argue that Moore is inapplicable because they are not seeking to amend a plan with extrinsic evidence, but that the PPDs, to which Employee Relations officers were instructed to turn for assistance in answering employee questions about their benefits, combined with the CG policies and the SPDs in effect for various years, themselves constitute the relevant plan documents. Although plaintiffs argue at length that no formal plan documents set forth the terms of what they characterize as the “Retiree Medical Plan” for pre-1985 retirees, the CG policies and certificates in effect from 1976 through 1984 define “employee” as including retirees who had been covered under that policy while in active employment. Therefore, the absence of any separate retiree medical plan is of no significance, as plaintiffs who retired in this time period are entitled to the benefits identified by the terms of the Plan in effect at the time of their retirement. At oral argument, plaintiffs conceded as much. The Court next considers plaintiffs’ position that the 1976 PPD must be considered part .of the plan because crucial terms are missing from the formal documents. Plaintiffs identify three allegedly missing terms: the absence of dura-tional language in the SPDs and CG policies, and the inclusion in the 1976 PPD of a description of the terms of the prescription drug and HMO coverage plans. In this Circuit, however, the absence of a dura-tional term in the formal Plan documents does not permit the Court to consider other documents to supply this term, but instead requires the conclusion that the Plan documents themselves lack affirmative vesting language. Next, in light of the existence of a separate policy and SPD covering prescription drug coverage, see infra, the absence of a discussion of the terms of the prescription drug plan in the CG policies and SPDs does not require the Court to look to the 1976 PPD to determine the terms of that plan. Finally, the reference to HMO coverage in the 1976 PPD describes defendant’s policy and future intent, but does not set forth any terms of HMO plan coverage, as plaintiffs contend: “The Company will make arrangements to afford individual Employees the option to subscribe to Health Maintenance Organization [sic] when they become available in their area, if such plans are approved by the Company, in lieu of all coverage provided in this section, subject to the limitation on Company contributions contained in Subparagraph (b) below.” Plaintiffs have thus failed to demonstrate that the CG policies and SPDs were incomplete in any way that would require the Court to look to the 1976 PPD to determine the terms of the medical insurance benefits plan applicable to pre-1985 retirees. Plaintiffs also claim that because they were informed by various Armstrong personnel managers that their benefits were to be provided in accord with terms of the PPDs and the PPDs were prepared by defendant for use as a resource for advising employees of their rights, they are properly to be considered part of the ERISA Plan. These communications served a purpose strikingly similar to that of the filmstrips and newsletters described in Moore. Permitting such informal communications to amend the terms of the formal ERISA plan, as plaintiffs’ urge the Court to do, would contradict Moore’s prohibition on informal amendment, and undermine ERISA’s framework: Were all communications between an employer or Plan beneficiaries to be considered along with the SPDs as establishing the terms of a welfare plan, the plan documents and the SPDs would establish merely a floor for an employer’s future obligations. Predictability as to the extent of future obligations would be lost, and, consequently, substantial disincentives for even offering such plans would be created. For the foregoing reasons, the Court concludes that the medical benefits Plan applicable to those plaintiffs who retired between 1976 and 1984 — Annatone, McEl-hannon, Young and Walker — consists only of the SPDs and CG policies. Having identified the applicable Plan, the next question is whether that Plan provides vested benefits. b. The pre-1985 Plan does not provide vested benefits While plaintiffs and defendant dispute whether the pre-1984 Policies or SPDs contained a reservation of rights, they agree that the CG policies and SPDs contain no terms providing for vesting of lifetime medical benefits. Plaintiffs argue, citing a Ninth Circuit case, Bower v. Bunker Hill Co., that “where the plan does not speak to vesting, extrinsic evidence must be considered to determine whether benefits are vested.” This application of Boioer, however, contradicts this Circuit’s subsequent interpretation of ERISA, under which an employer is not required to prove that its benefits plan contains language demonstrating an unambiguous intent not to vest; instead, plaintiffs must point to language in the Plan capable of being reasonably interpreted as a promise to vest benefits. The Joyce court emphasized that “[w]hile context surely matters ..., at root the text itself must create a disputed question of fact as to vesting.” Moreover, Joyce expressly considered and rejected the claim made here that in the absence of an explicit reservation of rights or other language explicitly limiting the plan’s duration, the lack of durational language in a plan permits the court to look outside the plan documents: “[w]e will not infer a binding obligation to vest benefits absent some language that itself reasonably supports that interpretation.” In the absence of any language that could reasonably be interpreted as a promise of vested lifetime medical insurance benefits, defendant was not barred by the terms of the Plan from modifying or terminating retiree medical benefits for the pre-1985 retirees. 2. Medical insurance benefits (postr-1985) Unlike the CG policies and SPDs in effect prior to 1984, the New Directions II document prepared in 1984 describing the changes in benefits under the new CG policy expressly “reserves the right to change, modify or discontinue any of the Plans at any time.” There is also no promise of lifetime, unchangeable benefits in any of the posU1985 plan documents. Plaintiffs attempt to circumvent this unambiguous language by arguing that the post-1985 plan described in New Directions II is inapplicable to retirees. According to plaintiffs, no formal document described the terms of the “retiree medical plan” for post-1985 retirees; instead, Armstrong’s “policies, procedures, forms and informal communications” established and explained the retiree medical plan. Although the New Directions II document, unlike the earlier SPDs and CG policies, does not specify whether its terms apply only to active salaried employees or to retirees as well, it provides that the CG policy will govern in light of any ambiguity, and the related CG insurance certificate in effect as of January 1, 1984 states that “If your Active Service ends because you retire: ... your Medical Insurance may be continued until your Employer stops paying premiums for you. See your Benefit Plan Administrator for details.” Thus, the CG certificate on its face contemplates potential continued benefits for retirees under that plan. Moreover, as defendant notes, plaintiffs claim a vested entitlement to the benefits that were in effect when they retired. Therefore, the absence of a separate plan for retirees does not suggest that there is no plan, but rather that they are covered under the terms that were in effect at the date of retirement, including the reservation of rights. In the face of the unambiguous language in the insurance certificate referencing application of the post-1984 medical insurance plan to retirees, the express reservation of rights in the New Directions document, and the absence of any language in either the certificate or the New Directions document providing for lifetime benefits for retirees, the post-1984 retiree plaintiffs — Taylor, Monko and McMunn — have not shown anything to permit a fact-finder to conclude that their retiree medical benefits were vested under the terms of the Plan. 3. Medicare Premium, reimbursement Defendant claims there was no ERISA welfare benefit plan governing Medicare B reimbursement created by the March 20, 1980 announcement letter, and that therefore its termination of the reimbursement program in 1993 cannot be a violation of ERISA. Under ERISA, an “employee welfare benefit plan” includes “any plan, fund, or program which was heretofore or is hereafter established or maintained by an employer or by an employee organization, or by both, to the extent that such plan, fund, or program was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, (A) medical, surgical, or hospital care or benefits ....” A “ ‘plan, fund, or program’ is established if from the surrounding circumstances a reasonable person can ascertain the intended benefits, a class of beneficiaries, the source of financing, and procedures for receiving benefits.” The plan need not be a formal, written document. Here, the intended benefit is, of course, the premium cost of medical coverage provided under Medicare Part B. The class of beneficiaries identified in the 1980 announcement letter are all pensioners and their spouses over age 65 who are currently enrolled in Medicare B. The letter clearly identifies the source of funding as the “the Company,” and further describes the procedures to follow in order to receive the benefit. The letter, therefore, meets the criteria set forth in Grimo, and establishes a welfare benefit plan governed by ERISA. The February 1983 application form also describes the benefit, the intended beneficiaries, and indicates that “payment of this benefit will be on a monthly basis and will continue during the pensioner’s lifetime.” The November 1989 application form, like the February 1983 form, identifies the benefit and the beneficiaries, and states that “[t]his benefit is payable for the lifetime of the retiree and/or spouse,” although it does not indicate whether benefits are paid monthly or quarterly. Both application forms detail the procedures to follow to receive the benefit. Defendant argues briefly that Medicare premiums are “manifestly” not included within the definition of “medical, surgical or hospital care or benefits.” However, as Medicare premiums are payments to cover medical insurance, they constitute a medical “benefit.” Defendant also argues that the Medicare reimbursement plan does not meet ERISA’s requirement of establishing an on-going administrative obligation, citing Schonholz, 87 F.3d at 75. The Second Circuit has identified a variety of factors to consider in determining when severance benefit plans are sufficiently complex to be deemed an on-going administrative scheme: whether the employer’s obligation requires managerial discretion in its administration, whether a reasonable employee would perceive an ongoing commitment by the employer to pay benefits, and whether the employer had to analyze the circumstances of each employee’s termination separately in light of certain criteria. In Fort Halifax Packing Co. v. Coyne, the Supreme Court addressed the policy reasons supporting its conclusion that a one-time payment was not an ERISA plan: [T]he requirement of a one-time, lump-sum payment triggered by a single event requires no administrative scheme whatsoever to meet the employer’s obligation. The employer assumes no responsibility to pay benefits on a regular basis, and thus faces no periodic demands on its assets that create a need for financial coordination and control .... To do little more than write a check hardly constitutes the operation of a benefit plan. Once this single event is over, the employer has no further responsibility. The theoretical possibility of a one-time obligation in the future simply creates no need for an ongoing administrative program for processing claims and paying benefits. The benefits at issue here are not provided as part of a severance package, most frequently a one-time event, but instead as part of an on-going administrative program. Unlike the plaintiffs in Fort Halifax, retirees over 65 here participated in an on-going plan through which they submitted a copy of their Medicare B card and a completed application form, and then received quarterly, and later monthly, reimbursement checks for their premiums. This required defendant to assume an obligation to pay benefits on a regular basis, and put periodic demands on its assets. The application forms also indicated that the Company would adjust the payment based on increases in the cost of Medicare Part B, thus requiring monitoring on the part of defendant. The Court is persuaded that this Medicare premium reimbursement plan meets the requirements of an ERISA plan. The next step, again, is to determine whether benefits under that Plan were vested. Defendant argues that because no formal plan document, including the March 20, 1980 letter, mentioned vesting, plaintiffs have no claim to vested benefits. However, where an employer has created an ERISA plan through informal documents, the intent to vest benefits need not be memorialized in a formal plan. Amendments to informal Plans will be considered binding where they are set forth “at the same level of formality that [the employer] chose in promulgating the [Plan] in the first place.” While defendant maintains that the promissory wording of the application forms cannot bind it because “none of the forms bore the signature or other official imprimatur of any Armstrong of Pirelli official,” both forms are on official letterhead and defendant has offered no evidence that the forms lacked Armstrong’s authorization for personnel use. In light of the level of informality of the original 1980 plan letter, the Court finds that the application forms are prepared at a sufficiently similar degree of formality to constitute amendments to that plan. Although the March 20, 1980 announcement letter that created the informal plan did not mention vesting, other communications from defendant to employees consistently described the Medicare premium reimbursement benefits in terms indicating vesting. The application forms prepared by defendant used vesting language such as “for the lifetime of the retiree and/or spouse.” Further, a June 16, 1991 letter sent to plaintiff McElhannon by Kathy Ade, Employee Benefits Administrator, states, consistent with these application forms, that Medicare Part B premium reimbursement payments for plaintiff James McElhannon and his wife “will continue until each individual’s death.” Defendant has provided no evidence that suggests that these forms are inauthentic, or that any forms or documents used by Armstrong in connection with this informal plan contained a reservation of defendant’s rights to amend or terminate the plan. Further, defendant has not shown that after the March 1980 letter was mailed to pensioners who had retired as of that date, any documents other than the application forms revised February 1983 and November 1989 were used by defendant to communicate the terms of the Plan to retirees. The promises made in the application forms amended the original plan and are thus enforceable under ERISA as terms of the plan. In summary, defendant’s use of language in the application forms it prepared for the Medicare reimbursement plan that “this benefit is payable for the lifetime of the retiree and/or spouse” created a vested benefit for all seven moving plaintiffs and the denial of further payment of such premiums by Pirelli in April 1993 violated ERISA, 29 U.S.C. § 1132(a)(1)(B). A Prescription Drug Coverage The 1977 SPD describing the prescription drug coverage policy expressly reserved Armstrong’s rights to cancel or amend the plan at any time. Plaintiffs again claim that the plan documents governing this benefit include the 1976 PPD, which identifies prescription drug benefits as one of the benefits that retirees are eligible to receive under the plan. Because the 1976 PPD contains language that could be interpreted as promising prescription drug coverage to retirees for their lifetime, plaintiffs’ argument goes, the PPD is necessary to interpret the prescription drug plan and should be read together with the SPD, which contains no such promissory language and indeed, expressly reserves the employer’s right to terminate or amend the plan. Plaintiffs have pointed to nothing within the text of the 1977 SPD that supports a claim of vested benefits. Once again, the dispositive question is whether the absence of durational language in an ERISA plan creates an ambiguity as to vesting that permits or requires the Court to look to extrinsic evidence such as informal communications like the PPDs to interpret that plan. As discussed above, in the Second Circuit it does not. Accordingly, in the absence of vesting language in the formal document prepared by the company describing the prescription drug benefit, the 1977 SPD, the pre-1985 retirees have no claim of vested benefits under the plan. Prescription drug coverage was also described in the 1984 New Directions II document and the 1989 Employee Benefits Handbook, which contained express reservations of rights, and made no promises of lifetime benefits. For the reasons set forth above, the benefits of posb-1985 retirees are governed by the terms of these documents, rather than the 1976 PPD. As no documentation properly considered part of the prescription drug plan covering either the pre-1985 or post-1985 retirees even arguably provides for vesting of prescription drug benefits, defendant is entitled to summary judgment on this claim as to all moving plaintiffs. 5. Summary In conclusion, plaintiffs have shown their entitlement to summary judgment on their claim that defendant violated the terms of an ERISA plan by discontinuing the Medicare premium reimbursement plan, as defendant unambiguously promised lifetime benefits and was therefore not permitted to terminate that program in 1993. In the absence of any material factual dispute as to the terms of that benefit plan, plaintiffs’ motion for summary judgment is granted as to Medicare reimbursement. However, with respect to medical insurance benefits and prescription drug coverage, plaintiffs have failed to provide evidence showing either that benefits vested under the terms of those plans or that the terms of the plans are ambiguous as to vesting. Accordingly, defendants are entitled to summary judgment on plaintiffs’ claims that defendant breached the terms of the plans, in violation of § 1132(a)(1)(B), by changing their medical insurance coverage and prescription drug plan in 1993. The Court now goes on to determine whether either plaintiffs or defendant have proven their entitlement to judgment as a matter of law on plaintiffs’ alternative claim that defendant breached its fiduciary duty by promising lifetime benefits that were not, in fact, vested. C. Breach of Fiduciary Duty ERISA requires a plan fiduciary to “discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries.” Under the Supreme Court’s decision in Varity Corp. v. Howe, individual beneficiaries may seek equitable relief for a breach of fiduciary duty under 29 U.S.C. § 1182(a)(3). Here, plaintiffs claim that if their rights to the medical benefits at issue here did not vest upon their retirement, defendant breached its fiduciary duty by misrepresenting to them that their benefits would continue for their lifetime during their retirement. Defendant responds that it is entitled to summary judgment on this count because no such material misrepresentations were made, or alternatively, that a factual dispute remains as to the existence and scope of any such misrepresentations. As the Court has concluded as a matter of law based on undisputed facts that only the Medicare B coverage vested, plaintiffs’ argument here applies to the medical benefit plan and the prescription drug plan. To establish a claim for breach of fiduciary duty based on alleged misrepresentations concerning coverage under an employee benefit plan, plaintiffs must show: (1) that the defendant was acting in a fiduciary capacity when it made the challenged representations; (2) that these constituted material misrepresentations; and (3) that plaintiffs relied on those misrepresentation to their detriment. Whether a misrepresentation is material is “ ‘a mixed question of law and fact’ based on whether ‘there is a substantial likelihood that it would mislead a reasonable employee in making an adequately informed decision > » 1. Matenal misrepresentations Plaintiffs argue that their claims here fall squarely within the holding of in In re Unisys Corp. Retiree Medical Benefit ERISA Litigation, There, the Third Circuit found that where “virtually the entire company management had consistently misrepresented the [retirement] plan, not just on one occasion or to one employee, but over a period of many years both orally (in group meetings) and in writing (in newsletters) as well,” retirees stated a claim for breach of fiduciary duty when the company changed their medical benefits contrary to its representations that such benefits would continue for the retirees lifetimes. The district court had found that the company knew that employees accelerated their retirement plans because of a belief that by retiring at a certain date they would lock in their benefits, that the company did nothing to correct this misunderstanding and instead reinforced the misunderstanding by continuing to reassure employees that their medical benefits would continue for life upon retirement, that the company systematically informed employees that their benefits would continue for life without qualification, and finally that the company consistently responded to specific questions about whether retiree benefits could change by assuring employees that they could not. The Third Circuit held that under these circumstances, although the employer had expressly reserved the right to amend or alter the plan in its SPDs, recognizing a breach of fiduciary duty claim would not “conflict with our policy against informal plan modification.” The court also observed that the breach of fiduciary duty claim differs from the modification argument “because it requires different proof (proof of fiduciary status, misrepresentations, company knowledge of the confusion and resulting harm to the employees) than would be required for a contract claim that the plans had been modified.” Id. Because the company failed to inform retirees, in response to specific questions, that their benefits could change, the court rejected the company’s argument that it could not be found liable for a breach of fiduciary duty because at the time lifetime benefits were promised to retirees, no one at the company knew or anticipated that they would ever be reduced. Defendant, in turn, argues that this case is more akin to International Union, United Automobile, Aerospace & Agricultural Implement Workers of America v. Skinner Engine Co., in which the Third Circuit found that where both employees and management had believed that their retirement benefits would continue for life, but there was no evidence that the company “affirmatively made representations to the effect that retiree benefits were vested and could never be modified or terminated by the company,” no claim for breach of fiduciary duty could lie. The court there also noted that “there is no evidence that suggests that the company stood silent and failed to properly advise employees when specifically asked about the duration of retiree benefits. There is no indication that the company created the belief in the minds of the employees that the retiree benefits could never be changed or terminated.” Defendant further cites Sprague v. General Motors, Inc., in which the Sixth Circuit rejected the claims of a group of GM retirees of entitlement to free, lifetime medical benefits. In denying the breach of fiduciary duty claim, the court noted that "GM never told the early retirees that their health care benefits would be fully paid up or vested upon retirement. What GM told many of them, rather, was that their coverage was to be paid by GM for their lifetimes. This was undeniably true under the terms of GM's then-existing plan." The court concluded that "GM's failure, if it may properly be called such, amounted to this: the company did not tell the early retirees at every possible opportunity that which it had told them many times before-namely, that the terms of the plan were subject to change." However, the court also observed that "[hJad an early r~tiree asked about the possibility of the plan changing, and had he received a misleading answei; or had GM on its own initiative provided misleading information about the future of the plan ... a different case would have been presented." Plaintiffs emphasize the importance of the duty to convey truthful, accurate information owed to beneficiaries by fiduciaries, and argue that to prevail on their breach of fiduciary duty claim they only need to show that defendant misrepresented to them that their retiree medical benefits would continue for their lifetimes. According to defendant, however, permitting an informal representation of lifetime benefits to modify the terms of an ERISA plan, however, is barred by the Second Circuit’s holding in Moore and the policy concerns outlined in that case. To respond to these competing concerns, other circuits have focused on whether the employer misled employees when specifically asked about the duration of retiree benefits, or made promises that retiree medical benefits could not be changed in the future, despite the fact that the Plans at issue did not provide for vested benefits. Although this Court does not speculate as to whether the outcome in Moore would have differed had a breach of fiduciary duty claim been alleged, the Court concludes that limiting recovery for a breach of fiduciary duty based on misrepresentations to those circumstances where an employer has provided affirmatively misleading information that contradicts the terms set forth in ERISA Plan documents or gives misleading, inaccurate or untruthful information in response to a specific inquiry from an employee about the duration of benefits or the possibility of future change balances the employees’ need for accurate, truthful information from their fiduciary and the employer’s interest in predictability as to its obligations. Consistent with Moore, an employer will not incur liability simply by providing informal communications, as long as those informal communications do not constitute affirmative misrepresentations. However, where an informal communication creates ambiguity when read together with the terms of the plan and the employee requests clarification of the terms of the plan and is given misleading information by the employer in response to that specific inquiry, the employer’s conduct may give rise to a breach of fiduciary duty. Similarly, where an employer affirmatively contradicts material terms of an ERISA plan when communicating, even informally, with beneficiaries who rely on the plan fiduciary for truthful information, it fails to “discharge [its] duties with respect to a plan solely in the interest of the participants and beneficiaries.” If such employees detrimentally rely on the material misrepresentations made by a fiduciary, a breach of fiduciary duty claim may lie under ERISA notwithstanding the bar on informal plan modification. It is undisputed that prior to April 1993, defendant had a “policy” of covering retirees in the same fashion as they were covered at time of retirement for the duration of retirement and fully intended to maintain that policy. The parties further agree that such a policy existed at the time each of the moving plaintiffs retired, and that they were aware of the policy. Finally, there is no apparent dispute that misrepresentations regarding duration of medical insurance are material, in that there is a “substantial likelihood that [they] would mislead a reasonable employee in making an adequately informed retirement decision.” The dispute here is whether this policy was stated in terms that constituted an affirmative misrepresentation by defendant that it would not exercise its right to alter or terminate these benefits during the retiree’s lifetime and until the death or remarriage of his spouse, or was simply a description of then-current policy and intention, which as a matter of law could be changed at a later date absent vesting language. Although defendant is correct that it had no obligation to “forecast the future,” it nonetheless had a fiduciary duty to truthfully answer plaintiffs’ questions about the possibility of changes to their benefit plans after retirement. Moreover, this duty prohibited it from conveying materially misleading or inaccurate information about benefits to employees. The resolution of this claim thus turns on what inquiries were made by plaintiffs, and what representations, or misrepresentations, were made by defendant in response to those inquiries. Even under the narrowest reading of the relevant case law, any employees who were expressly told by a person acting in a fiduciary capacity that their retirement benefits could not be changed during retirement received affirmative misrepresentations. In contrast, the simple statement by a fiduciary that benefits “will continue in retirement” without any dura-tional limit is not a material misrepresentation because the statement is neither untrue or misleading, and could not create a reasonable expectation that benefits had vested. More difficult to categorize are the alleged representations by Armstrong/Pirelli that benefits would continue during retirement for the lifetime of the plaintiffs. The Third and Sixth Circuits appear to have parted company on whether such promises constitute misrepresentations. In Sprague, the Sixth Circuit held that such promises were not misleading because the employer had clearly reserved its right to amend the plan and “never told the early retirees that their health care benefits would be fully paid up or vested upon retirement. What GM told many of them, rather, was that their coverage was to be paid by GM for their lifetimes. This was undeniably true under the terms of GM’s then-existing plan.” Similarly, in Byrnes v. Empire Blue Cross and Blue Shield, the court held that there was no breach of fiduciary duty as a matter of law where Empire had allegedly represented that retiree life insurance would remain constant for the remainder of the plaintiffs’ lives, although the SPDs contained express reservations of rights. The court ruled that because “there was no indication that the representations that plaintiff cite as being dishonest did not sincerely represent the intentions of Empire at the time those representations were made,” and there is no duty under ERISA to disclose contemplated changes, Empire’s descriptions of benefits as “lifetime” was not misleading or dishonest, and instead “described the plan accurately by setting forth what it intended to offer to retirees while expressly reserving the right to amend or terminate the benefits.” In contrast, in Unisys, the Third Circuit rejected the argument that representations that benefits would continue for an employee’s lifetime were simply true statements of then-current policy, finding a breach of fiduciary duty where “some individuals specifically asked if their benefits would continue for life and were told they would, without any mention of the reservation of rights clauses ... [and] Unisys was aware of the retirees’ confusion regarding the applicability of these clauses to their benefits and the retirees’ mistaken belief that their benefits could not be terminated once an employee