Full opinion text
OPINION AND ORDER GRANTING AND DENYING SUMMARY JUDGMENT HELLERSTEIN, District Judge. Plaintiffs are long-term employees, managers and agents of The Equitable Life Assurance Society of America (“Equitable”). They filed this lawsuit, for themselves and others similarly situated, to challenge changes by Equitable to its retirement plans. By a series of resolutions and notices, beginning November 1988 and over the next several years, Equitable announced changes in its plans, converting them from defined benefits based on an average of final years of compensation, to annually adjusted cash balance plans. Plaintiffs allege that the amendments (1) were put into effect without having given proper notice to all participants and (2) discriminate against older employees. The pre-trial proceedings have been extensive. I granted Plaintiffs’ motion for class certification, and certified the class alleged in the complaint and the adequacy of Plaintiffs as class representatives. The parties have conducted discovery of witnesses and experts, and I have conducted an evidentiary hearing of Defendants’ procedures in delivering notices to participants. Both Plaintiffs and Defendants now move for summary judgment, and both sides represent that there are no triable issues of any material fact. Their briefs and submissions fully develop the issues and the few cases in this burgeoning area of pension practice. For the reasons discussed in this Opinion, I hold that Equitable’s amendments to its retirement plans do not discriminate against participants on account of age, but that Equitable’s notice of December 1990 was materially defective, substantively and procedurally. Although Equitable’s Summary Plan Description sent to all participating agents, employees and managers on December 10, 1992 substantially cured the deficiencies of content, the cure was made well after the effective date of change for employees and managers, and therefore could not validate the amendments previously intended for them. The earliest effective date of the amendments is fifteen days after the date of the notice, or January 1, 1993. As to agents, the 1992 Summary Plan Description constituted fair notice under ERISA. Accordingly, I grant summary judgment for Plaintiffs, and I deny summary judgment for Defendants. However, the consequence of this decision requires additional resolution in order to become final, as described in the last paragraphs of this Opinion. I. THE PRIOR PROCEEDINGS Plaintiffs filed their class action complaint August 23, 2001. The first claim for relief alleged that, by reducing the rate of accruals based on age, the Plan violates ERISA’s prohibition on reductions on account of age or service. 29 U.S.C. § 1054(b)(l)(H)(i) (2006). The second alternative claim for relief alleged that the change to the Cash Balance formula, which caused a significant reduction in the rate of future benefit accrual, was not provided to Plaintiffs with adequate notice. Id. § 1054(h). The third alternative claim for relief alleged that the application of the Cash Balance formula retroactively reduced accrued benefits. Id. § 1054(g). By stipulation filed April 18, 2002, the third alternative claim for relief was dismissed with prejudice. Plaintiffs filed a motion to certify this action as a class action on April 10, 2002, pursuant to Rule 23 of the Federal Rules of Civil Procedure. Upon consent of the parties, and pursuant to Rule 53 of the Federal Rules of Civil Procedure, I appointed David S. Preminger as Special Master to make recommendations regarding class certification. (Order dated Sept. 6, 2002). Through his Revised Report and Recommendation filed October 31, 2002, and statements made before the Court at a hearing on October 29, 2002, the Special Master reported that although Plan participants had interests which diverged from those of the named Plaintiffs, class certification was nonetheless appropriate. Plaintiffs. filed an Amended Complaint on April 1, 2003, in response to the Special Master’s Report, which alleges that (1) the implementation of the Cash Balance formula was ineffective due to inadequate notice, 29 U.S.C. § 1054(h); (2) the Cash Balance formula caused rate of benefit accruals to be reduced on account of age, id. § 1054(b)(l)(H)(i); (3) the de-grandfather-ing of employees and managers was ineffective due to inadequate notice, id. § 1054(h); and, in the alternative, (4) the de-grandfathering was ineffective as to five class representatives who did not receive, the notice, id. § 1054(h); 29 C.F.R. § 2520.104b-l(b). I granted Plaintiffs’ motion for class certification. (Order dated May 22, 2008, filed May 23, 2003). Pursuant to Rules 23(b)(1) and 23(b)(2) of the Federal Rules of Civil Procedure, I certified a class consisting of all current and former Plan participants, whether active, inactive or retired, and their beneficiaries and estates, whose accrued benefits or pension benefits are based on the Plan’s Cash Balance formula. I also certified a sub-class, under the third claim for relief alleging ineffective notice of de-grandfathering, consisting of all current and former Plan participants, whether active, inactive or retired, their beneficiaries or estates, who were subject to the “de-grandfathering amendment” of the Plan. Defendants moved for summary judgment July 30, 2003, arguing that the statute of limitation barred Plaintiffs’ claims. I denied Defendants’ motion, finding questions of fact regarding when notice was given and when Plaintiffs should have been aware of the alleged injury. (Order dated Oct. 24, 2003, filed Oct. 27, 2003). Plaintiffs moved for summary judgment on liability July 1, 2004, this time to adjudicate the issues of Defendants’ liability, and Defendants cross moved for summary judgment to dismiss the Amended Complaint. The parties appeared before me for oral argument October 14, 2004. I offered the parties the option of consenting to my hearing the motions in a bench trial pursuant to Rule 52 of the Federal Rules of Civil Procedure (Tr. 2), but the parties declined (Tr. 3, 4). Finding significant factual disputes, I reserved decision and ordered the parties to undertake depositions and file supplementary submissions. (Tr. 91-95). Upon consideration of the supplementary submissions, I denied both motions, again finding significant factual and legal disputes. (Order dated Mar. 31, 2005, filed Apr. 17, 2005). The parties met with me in conference April 19, 2005, at which I proposed an evidentiary hearing to resolve the major outstanding issue of fact, Equitable’s notice procedures, followed by renewed summary judgment motions. By Joint Scheduling Order, the parties agreed to further depositions, an evidentiary hearing, and renewed summary judgment motions. (Order filed June 22, 2005). The parties filed the instant, renewed motions for summary judgment on July 12, 2005. They appeared for an evidentiary hearing on August 3, 2005, August 4, 2005, and August 8, 2005, and for oral argument on September 15, 2005. I granted Plaintiffs’ motion for leave to supplement the record following those proceedings (Order dated Sept. 20, 2005), and denied Defendants’ motion to strike the supplemental submissions (Order dated Oct. 31, 2005, filed Nov. 11, 2005). II. SHIFTING GROUND IN PENSIONS Equitable for some time had three, separate retirement plans for its employees, managers and agents. Each plan was based on a formula that multiplied the number of years of a participant’s credited service, times a base made up of an average of the participant’s highest monthly earnings for any sixty consecutive months during a 120-month period, to yield a defined benefit at normal retirement age. The defined benefit was then compared to the participant’s social security benefit, and the excess of the defined benefit was paid to the participant after retirement. The principal feature of such defined benefit plans was to weight the compensation earned by participants in their late, pre-retirement years, for these, generally, were the years of highest salaries or commissions. Equitable’s plans, and similar defined benefit plans in other companies, thus rewarded the continued loyalty and the continuing service of its employees. Defined benefit plans that satisfied the criteria provided by the Internal Revenue Code entitled participants to tax deferral of benefits until actual pay-out. Defined benefit plans’ pension benefits must vest after five years, and accrued benefits must be between the 3% minimum rule and the 133 1/3 % maximum rule, in order to qualify for tax benefits on their contributions. Employers assume the risk of estimated investment returns, so that, subject to opinions of licensed actuaries, investment returns reasonably expected on the aggregate of such employers’ contributions could increase, or decrease, employers’ obligations. In defined contribution plans, in contrast, each employee has an individual account consisting of contributions actually made by the employer and, depending on the plan, contributions made by the employee. The employee’s pension is then paid out of this individual account, and the employee, rather than the employer, has the risk of increase or decrease in value for the account. Individual Retirement Accounts and “401-Ks” are tax advantaged examples of defined contribution plans. Typically, they lack the leveraging features of defined benefit plans, but provide certainty of ownership to employees. By the late 1980’s, particularly in light of changing economic conditions and uncertain stock markets, companies became interested in reducing their obligations under defined benefit plans. As the nation’s work force became more mobile, the interest of participants in earlier vesting and more flexible portability of their retirement benefits also grew. Cash balance plans were introduced to satisfy these interests. Cash balance plans typically are a hybrid of traditional defined benefit and defined contribution plans, but are dealt with by the statutes as a species of defined benefit plans. Under these plans, each participating employee has an account in which the employee earns hypothetical pay credits based on the employee’s wages, salary or other compensation, supplemented by hypothetical interest credits. Like defined benefit plans, the employees’ cash accounts are hypothetical, reflected by balance sheet obligations of the sponsoring company and such reserves as may support those obligations under generally accepted accounting principles or governing statutes, regulations, or provisions of a collective bargaining agreement. Like defined contribution plans, cash balance plans tend to feature earlier vesting and portability, that is, the employee does not lose his/her cash account if s/he leaves his/her job before reaching retirement age. Cash balance plans in themselves are not controversial; it is the conversion from defined benefit plans to cash balance plans that has given rise to litigations like this one. See Campbell v. BankBoston, N.A., 327 F.3d 1, 8 (1st Cir.2003). A. The 1988 Amendment Affecting Employees and Managers i. The Resolution of November 1988 By resolution of November 17, 1988 (the “1988 Resolution”), Equitable’s Board of Directors, citing the recently enacted Tax Reform Act of 1986, resolved to merge its separate retirement plans for its employees and managers into one plan, and to amend the plan by changing the then existing Final Average Monthly Earnings formula to a Cash Balance formula, effective January 1, 1989. Pursuant to the Cash Balance formula, a hypothetical Cash Account was to be created for each participating employee and manager of Equitable, and Equitable, upon the participant’s retirement, would be obligated to provide to the participant either the lump sum of the account or an annuity of equal value. Provisions for pay out were provided also for participants when employment was terminated before reaching retirement age. The Cash Account for each participant was to be an accumulation of hypothetical monthly contributions, measured by 5% of the participant’s annual compensation up to the participant’s Social Security yearly (FICA) benefits base, and 10% of the excess of the employee’s compensation over such base, plus minimum, undefined, monthly interest on such sums. The resolution of Equitable’s Board also provided for a more liberal vesting of benefits, to occur upon five years of credited service, and for the cessation of cost-of-living adjustments (“COLAs”) for retirement benefits accruing after December 31,1988. The resolution of Equitable’s Board provided that the amendment, should not affect existing participating employees and managers. All plan participants as of December 31, 1988 were “grandfathered,” so that the benefits accrued under the employees’ or managers’ plan as of December 31, 1988, including post-retirement COLA benefits, were frozen. These Earned Benefits were to be summed with the greater of (1) the benefits for employment after December 31, 1988 as calculated using the Final Average Monthly Salary formula using total years of Credited Service, without COLA benefits; or (2) the benefits for employment after December 31, 1988 as calculated using the Cash Balance formula without COLA benefits. ii. The Notice of December 1988 Equitable issued notice of its merged and amended retirement plans for employees and managers by a one-page letter dated December 5, 1988, addressed to “All Employees and Agency Force Managers,” and an attached ten-page brochure of highlights, entitled “A Plan for the Future” (the “1988 Notice”). Equitable’s “objective” in making the change, the brochure stated, was “to comply with changes mandated by current Federal law, continue to provide significant retirement security, and do so with prudent financial management.” Accordingly, the brochure stated, Equitable designed its new retirement plan to be “more responsive to the changing needs of today’s workforce,” with Cash Accounts “in which [the] retirement benefit grows over time” as “Pay Credits,” based upon participants’ monthly pay, credited by Equitable, plus interest set “at a competitive rate each year.” Upon vesting, the brochure stated, the employee will have the right, when leaving the company, to take his accumulated account “as a lump sum or have it paid as a monthly annuity at retirement.” The brochure purported to “provide only a preview of the new features” and acknowledged that it could not “answer all of [the participant’s] questions.” The brochure indicated, rather, that more detailed information would be provided in early 1989. Equitable’s brochure advised employees and managers that they would benefit by becoming participants of the new plan on the first of the month following employment or appointment, and by more liberal vesting provisions that provide for vesting after five years instead of ten years of Credited Service. The brochure stated that the amount of Equitable’s Pay Credits to participants’ hypothetical Cash Accounts would be 5% of pay (inclusive of overtime and incentive compensation) up to the Social Security wage base (the point at which FICA withdrawals stop), and 10% above that wage base, plus an Interest Credit, described generally as a “competitive interest rate” to be set annually. The brochure did not state who would determine the interest rate or how it was to be determined, but stated that the interest rate in 1989 would be 8.5%. The brochure further explained that COLAs would not be applied to benefits accrued after December 31, 1988. It explained that the elimination of COLA was consideration for the added “flexibility and security” provided by “the value of the cash payment available under the new Cash Account, plus the higher potential benefits provided under the amended Plan formula.” The brochure advised current plan participants that they would not be prejudiced by the new Cash Account plan, but rather that the benefits of all current plan participants under the new plan would be “at least equal” to that which they would have been under the “current formula,” except that there would not be any post-retirement adjustments for COLA for benefits earned after December 31, 1998. Retirement benefits for grandfathered participants would be comprised of two components. The value of Credited Service through December 31, 1988, called the Earned Benefit, was to be calculated as if the employee left Equitable on December 31, 1988, including COLA benefits, and the benefits were to be paid as a monthly annuity after retirement. Additionally, the grandfathered participant would be eligible for benefits equal to the greater of two amounts: either (1) the Cash Account balance accumulated on the basis of employment after December 31, 1988, or (2) benefits that would have been accumulated under the old formula for continued service, but without COLA. The sum of the two components — the Earned Benefit and the greater of the posi>-1988 benefits under the old or new plan — would constitute the participant’s retirement benefits, and become an annuity payable over the member’s life or payable, in part, as a lump sum. Alternatively, the brochure described the new plan as applied to grandfathered members as affording three possible payments: (1) the Earned Benefits plus COLA; and (2) the Cash Account balance as a lump sum or annuity, but without COLA; and, if the benefits under (2) were less than they would have been under the old plan, then (3) the hypothetical benefits under the old plan for the total years of Credited Service, less the sum of benefits under (1) and (2), without COLA. B. The 1989 Resolution Affecting Interest Rate A year later, by resolution dated December 14, 1989 (the “1989 Resolution”) and a letter dated January 17, 1990, Equitable quantified the interest rate that it would use to add Interest Credits to participants’ Cash Accounts: the average rate for one-year Treasury Bills for the twelve months preceding December every year, rounded to the nearest twenty-five basis points. For the year 1990, the rate was to be 8.0%. C. The 1990 Amendment and Notice Affecting Grandfathering i. The Resolution of November 1990 By resolution of November 15, 1990 (the “1990 Resolution”), Equitable’s Board of Directors resolved to limit the grandfathering provision establish in 1988 to a more select group of participants, specifically to those who had “either attained age 50 or completed 20 years of vesting service by December 31, 1990.” The resolution cited a memorandum dated November 7, 1990 for further details. ii. The Notice of December 1990 By a one-page notice dated December, 1990 addressed to “Participants in the Equitable Retirement Plan for Employees and Managers,” (the “1990 Notice”), Equitable announced an amendment, effective January 1, 1991, to limit grandfathering. Thenceforth, after December 31, 1990, only those participants who either had attained age fifty or had completed twenty years of service by December 31, 1990 could receive benefits under the grandfathering provision. For all other participants, Equitable advised, retirement benefits earned after 1990 would be paid only according to the Cash Account formula. Participants were referred to an attached one-and-a-half page Benefits Update, dated December 4, 1990, for more information. The Benefits Update referred, in turn, to the notice given by Equitable two years earlier, in December 1988, for a description of the change to Cash Accounts. The Benefits Update itself advised that, effective January 1, 1991, the “special ‘grandfathering’ provision” described in the 1988 Notice was to be continued only for those participants who either had attained age fifty or had completed twenty years of Credited Service. For all others, benefits earned after 1990 were to be determined only under the Cash Account formula. For more information, participants were invited to telephone the “Retirement Plan Unit” at New York City headquarters. A telephone number was given. The cover notice and the Benefits Update did not themselves provide further descriptive details of the Cash Balance plan or interest rate methodology. D. The 1992 Amendment and Notice Affecting Agents i. The Resolution of September 1992 By resolution of September 17,1992 (the “1992 Resolution”), Equitable’s Board of Directors resolved to merge its retirement plan for agents into its plan for employees and managers, and to provide that its agents also would have their retirement benefits determined under its Cash Balance plan. The resolution referred to a memorandum of September 8, 1992 for details. The September 8, 1992 memorandum explained that certain agents — those who were at least fifty years old or had at least twenty years of service as of December 31, 1992, and “Hall of Fame” agents who were at least forty years old as of that date — would be grandfathered under the old plan for agents, and that grandfathered agents would be eligible for the higher of benefits under (1) the pre-1993 agents’ plan, or (2) the Cash Balance plan, but that there would no post-retirement COLA for benefits accrued after 1992. The grandfathered group was estimated to constitute 27% of total plan participants. The extension of the Cash Balance plan to agents was estimated to decrease Equitable’s GAAP expenses by $1.8 million. ii. The Notice of November 1992 Equitable announced the changes to its agents on November 24, 1992 (the “November 1992 Notice”) by a one-and-a-half-page letter addressed to “All Equitable Agents.” The changes, it told its agents, would become effective January 1, 1993, and were intended as “an innovative approach to building [the participant’s] financial security, ... designed to be more responsive to the changing needs of today’s work force.” The Cash Balance formula was described as monthly Pay Credits based on 5% of monthly compensation up to the level of FICA, and 10% of compensation thereafter, plus Interest Credits “at a rate determined at the beginning of each year,” guaranteed for that year. Agents with five or more years of service who left the company could take their vested Cash Accounts with them, or leave their accounts in Equitable’s retirement plan. As for existing benefits before the Cash Balance plan became effective, they were to be “frozen” and paid following retirement, provided the participant had at least five years of service before retirement. Finally, the notice to agents stated also that there would be a grandfathering provision for those “nearing retirement,” but did not identify which agents would be grandfathered. Participants were referred to a booklet that was to be distributed in early December for details. The November 1992 Notice did not mention the elimination of COLA, and did not quantify the interest that was to be paid. E. The Notice of December 1992 Under cover of a December 10, 1992 letter, Equitable delivered an extensive Summary Plan Document (“SPD”), entitled “Benefits: Retirement Plan” (the “1992 Notice”), to all associates — employees, managers and agents. The cover letter directed questions to Human Resources or the Operations Managers. The SPD contained three sections. Section I pertained to the Cash Balance Account; Section II discussed the Pre-1989 Formula for employees and managers; and Section III discussed the Pre-1993 Formula for agents. i. SPD Section I — The Cash Balance Account For each associate (employee, manager or agent), on the first day of the month on or after reaching age twenty-one and completing one year of service, a Cash Balance Account was to be established. The account was not to be an actual account holding actual contributed amounts, but was to be established “for record-keeping purposes only,” without withdrawal or borrowing rights for the participant prior to retirement or termination of employment. Equitable was to incur the obligation to contribute Pay Credits to the account, at the 5% and 10% contribution levels previously discussed, plus Interest Credits each month. Earnings, as the basis for Equitable’s contribution obligations, were defined broadly, to include overtime, shift differentials, and short-term incentive compensation and, for agents, various categories of commissions. Equitable obligated itself to credit interest monthly, at a rate established in advance each year, to be applied to the Cash Balance as of the first day of each ensuing month. The interest rate was to be the average of one-year Treasury Bills for the twelve-month period ending November the prior year, and that rate was guaranteed for the entire year. By way of illustration, according to the SPD, the interest rates Equitable contributed between 1989 and 1992 varied between 8.5% and 5.75%. The SPD presented a table depicting retirement benefits under the Cash Balance plan for participants with five to forty years of participation in Equitable’s plans. The table assumed an annual salary of $30,000 and calculated retirement benefits projected on the basis of three sets of annual interest rates: 4%, 6%, and 8%. Participants were to be vested after five years of service, or upon reaching sixty-five or dying during active service. Retirement was to be available at age fifty-five if the participant had ten years of service, or upon the participant’s reaching age sixty-five. On the first day of the first month following retirement, the Cash Account could be paid as a lump sum, or as a monthly annuity, and participants could withdraw their Cash Account upon earlier termination of employment. Cash Account payments were not adjusted for COLA. ii. SPD Section II — The Pre-1989 Formula for Employees and Managers For employees and managers who were participants in the retirement plan as of December 31, 1988, and continued service after that date, the SPD explained their eligibility for two categories of benefits upon retirement or earlier termination of service: the frozen annuity benefit as of December 31, 1988, and the Cash Account thereafter. The SPD also explained the availability of post-retirement COLAs for both categories of benefits. The Pre-1989 Formula calculated the frozen annuity benefit as a multiple of the employee’s or manager’s Final Average Monthly Earnings and years of Credited Service, less the Social Security offset. The “Final Average Monthly Earnings” were calculated as the average of highest monthly earnings for any sixty consecutive months during the 120-month period ending December 31, 1988, or for the entire work period if less than 120 months were worked. Only Credited Service counted toward the benefit calculation, and an employee or manager had to be over twenty-five years old before 1985, and over twenty-one years old after 1985, for service to be credited. The years of Credited Service were used to calculate a “Service Reduction Factor,” so that, if the employee or manager had worked fewer than thirty years, the Final Average Monthly Earnings were multiplied by a Service Reduction Factor equal to the fraction of Credited Service years divided by thirty. The “Social Security Offset” was calculated as 80% of the employee’s or manager’s Estimated Social Security Benefit, multiplied by a factor known as the “PIA Reduction Factor.” The “Estimated Social Security Benefit” was calculated either assuming continued employment at the employee’s or manager’s 1988 wage until age sixty-five, or, upon the employee’s or manager’s request, using actual Social Security earnings history at retirement. The “PIA Reduction Factor” was calculated by dividing the employee’s or manager’s years of Credited Service as an employee or manager as of December 31, 1988 by the total years of Credited Service as an employee, manager, or agent if the employee or manager had continued to work until age sixty-five. The actual Pre-1989 Formula used to calculate the frozen benefits was stated as: (60% of Final Average Monthly Earnings) x (Service Reduction Factor)— (Social Security Offset) = Retirement Benefit under Pre-1989 Formula. The introduction of the Cash Account froze this base calculation for participants as of December 31, 1988, except to the extent that the formula may have been applied to later earnings for grandfathered employees and managers. Examples were provided for a participant who retired at age sixty-five with twenty-four years of Credited Service as of December 31, 1988, and Final Average Monthly Earnings of $2,000. That was compared to a minimum benefit formula, a formula helpful to those earning less than $20,000 per year. Tables were also provided for early retirement at age fifty-five or older. Those retiring early were entitled to receive a temporary annuity that supplemented the early retirement benefit until the participant reached age sixty-five, and examples were provided for that. Benefits accrued before December 31, 1988 were eligible for post-retirement COLAs, up to an annual 6% increase or decrease, based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers in the United States for the twelve-month period ending September 30th of a given year, applied after January 1 of the following year. Benefits accrued after December 31, 1988 were not eligible for COLAs. iii. SPD Section III — The Pre-1993 Formula for Agents For agents who were participants in the retirement plan as of December 31, 1992, and continued service after that date, the SPD explained their eligibility for two categories of benefits upon retirement or earlier termination of service: the frozen annuity benefit as of December 31, 1992, and the Cash Account thereafter. The SPD also explained the availability of post-retirement COLAs for both categories of benefits. The SPD described the Pre-1993 Formula as a “Career Accrual Formula.” An agent’s annuity benefit was calculated by adding a percentage of the agent’s Annual Total Commissions for each year of participation from 1984 through 1992 to the agent’s January 1, 1984 Accrual Base, less the estimated Social Security benefit. Specifically, the SPD presented the following formula for calculating monthly benefits under the Pre-1993 Formula: (January 1, 1984 Monthly Accrual Base) + [ (1/12) x (2% of Annual Total Commissions for each year of participation 1984-1992) ] + (Ad-Hoc COLA Adjustments) — (Social Security Offset) = Retirement Benefit under the Pre-1993 Formula. The Accrual Base was calculated as the Minimum Guaranteed Benefit, plus two-thirds of the Estimated Social Security Benefit, multiplied by the PIA Reduction Factor, all as of December 31, 1983. The Minimum Guaranteed Benefit was defined as the monthly benefit earned under the Final Average Pay Formula in effect for agents until December 31, 1983. The PIA Reduction Factor was calculated as the fraction of Credited Service as of December 21, 1992 over total years of Credited Service the agent would have worked until age sixty-five. The Ad-Hoc Adjustments were detailed for the relevant years, ranging from 0% in 1984 to 11.8% in 1990. The Social Security Offset was calculated as two-thirds of the estimated Social Security Benefit multiplied by the PIA Reduction Factor. The SPD included an example of the calculation of benefits under the Pre-1993 Formula. It assumed the agent was fifty-six years old, with twenty-seven years of Credited Service as of December 31, 1992. It assumed an Accrual Base of $1,400 per month, Annual Total Commissions increasing from $40,000 to $48,000, and an estimated Social Security Benefit of $1,120 per month. The SPD calculated a monthly benefit under the Pre-1993 Formula equal to $1,894, which would be in addition to benefits subsequently earned in the Cash Account. The SPD explained that early retirement was an option under the Pre-1993 Formula. Retirement was available as early as fifty-five, as long as the agent had completed at least ten years of Vesting Service. If an agent were to retire before age sixty-five, their monthly annuity benefits would be reduced by a factor, according to the number of vested years. The SPD included examples of the calculation of reduced early retirement benefits under the Pre-1993 Formula. Benefits accrued before December 31, 1992 were eligible for post-retirement COLAs, up to an annual 6% increase or decrease. In addition, a 2% step-up increase applied to benefits earned before January 1, 1984, whereby for each year for the first ten years of retirement an additional 2% would be added to the COLAs. Benefits accrued after December 31, 1992 were not eligible for COLAs. iv. SPD — Beneñts for Grandfathered Participants The SPD described the retirement benefits for participants who were eligible for grandfathering under the Pre-1989 Formula for Employees and Managers and under the Pre-1993 Formula for Agents. Grandfathered participants would not lose eligibility for benefits under the pre-cash-balance plans. However, the benefits accruing after the effective date of the Cash Balance plan for their respective group, either in the form of Cash Account benefits or Additional Grandfather Benefits, would not be eligible for post-retirement COLAs. 1. Benefits for Grandfathered Employees The SPD provided that employees who were participating in the plan as of December 31, 1988, and who were at least fifty years old on December 31, 1990 or who had completed twenty or more years of Vesting Service by December 31, 1990, were grandfathered under the Pre-1989 Formula. The SPD presented the formula for calculating grandfathered employees’ retirement benefits as: (Frozen Annuity Benefit under the Pre-1989 Formula on December 31, 1988 + post-retirement COLA) + (Cash Balance Account) + (Additional Grandfather Benefit) = Retirement Benefit under the Employee Grandfather Provision. A grandfathered employee was eligible for the Additional Grandfather Benefit if the benefits the employee would receive from the Frozen Annuity Benefit and the Cash Balance Account were less than those the employee would have received under the Pre-1989 Formula for all of the years of Credited Service and Earnings. The SPD offered examples of the calculation of benefits under the grandfather provision for employees. The first example assumed the benefits under the Frozen Annuity Benefit and the Cash Account were less than those under the Pre-1989 Formula counting all years of Credited Service, and showed the calculation of the Additional Grandfather Benefit. The second example assumed the benefits under the Frozen Annuity Benefit and the Cash Account were more than those under the Pre-1989 Formula, and showed that the grandfathered employee would enjoy the increased benefits of the Cash Balance Account without any Additional Grandfather Benefit. The SPD explained the Pre-1991 Grandfathering Provision, under which employees who participated in the plan as of December 31, 1988, but were younger than fifty and had fewer than twenty years of Vesting Service as of December 30, 1990, were eligible for grandfathering only through December 31, 1990. The Pre-1991 Grandfathering Provision functioned the same as the previously described grandfathering for employees, but applied to an' abbreviated amount of time, that is between December 31, 1998 and December 31,. 1990. 2. Benefits for Grandfathered Managers The SPD provided that managers who were participating in the plan as of Decern-ber- 31, 1992, and were at least fifty years old on December 31, 1992, had completed twenty or more years of Vesting Service by December 31, 1992, or were entitled to “Hall of Fame” treatment by December 31, 1992, were grandfathered under the Pre-1989 Formula. The SPD directed those grandfathered managers to the description of the Pre-1989 Formula in Section II of the SPD. Individuals participating in the plan as of December 31, 1988 but not active managers on December 31, 1992, were eligible for grandfathering only under the Pre-1993 Manager Formula. The SPD explained that the benefits for grandfathered managers would be calculated by the following: (Frozen Annuity Benefit under the Pre-1993 Formula for Agents on December 31, 1992) + (Frozen Annuity Benefit under the Pre-1989 Formula for Employees and Managers on December 31, 1988) + (Cash Balance Account) + (Additional Grandfather Benefit) = Retirement Benefit under the Manager Grandfather Provision. A grandfathered manager was eligible for the Additional Grandfather Benefit if the benefits the manager would receive from the Frozen Annuity Benefits and the Cash Balance Account were less than those the manager would have received under both the Pre-1989 Formula for all of the years of manager Credited Service and the Pre-1993 Formula for all of the years of agent Credited Service and Annual Total Commissions. The SPD offered examples of the calculation of benefits under the grandfather provision for managers. The first example assumed the benefits under the Frozen Annuity Benefits under the Pre-1989 and Pre-1993 Formulas and the Cash Account were less than those under both the Pre-1989 Formula for all of the years of manager Credited Service and the Pre-1993 Formula for all of the years of agent Credited Service and Annual Total Commissions, and showed the calculation of the Additional Grandfather Benefit. The second example assumed the benefits under the Frozen Annuity Benefit and the Cash Account were more than those under the Pre-1989 and Pre-1993 Formulas, and showed that the grandfathered manager would enjoy the increased benefits of the Cash Account without any Additional Grandfather Benefit. S. Benefits for Grandfathered Agents The SPD explained that agents who were participating in the plan as of December 31, 1992, and were at least fifty years old on December 31, 1992, had completed twenty or more years of Vesting Service by December 31, 1992, or were entitled to “Hall of Fame” treatment by December 31, 1992, were grandfathered under the Pre-1993 Agent Formula. The SPD presented the formula for calculating grandfathered agents’ retirement benefits as: (Frozen Annuity Benefit under the Pre-1993 Formula on December 31, 1992 + post-retirement COLA + 2% Step-Up) + (Cash Balance Account) + (Additional Grandfather Benefit) = Retirement Benefit under the Agent Grandfather Provision. The grandfathered agent was eligible for the Additional Grandfather Benefit if the benefits the agent would receive from the Frozen Annuity Benefit and the Cash Account were less than those the agent would have received under the Pre-1993 Formula for all of the years of Credited Service and Annual Total Commissions. The SPD offered examples of the calculation of benefits under the grandfather provision for agents. The first example assumed the benefits under the Frozen Annuity Benefit and the Cash Account were less than those under the Pre-1993 Formula counting all years of Credited Service and Annual Total Commissions, and showed the calculation of the Additional Grandfather Benefit. The second example assumed the benefits under the Frozen Annuity Benefit and the Cash Account were more than those under the Pre-1993 Formula, and showed that the grandfathered agent would enjoy the increased benefits of the Cash Account without any Additional Grandfather Benefit. F. The Amendment and Notice Affecting Interest Rates i. The Plan Document of December 1994 The 1994 Plan document, adopted on December 29, 1994, set a minimum interest guarantee for Interest Credits to be credited to Cash Accounts. The Plan document indicated that all Interest Credits made to Cash Accounts would be not less than 4%. Prior to that adoption, interest was to be fixed year to year, as was described in the 1988 Notice and illustrated in the 1989 Resolution. Following 1994, the Interest Credit that was to be awarded with each Pay Credit to plan participants would be the greater of the average rate for one-year Treasury Bills for the twelve months preceding December every year, rounded to the nearest twenty-five basis points, or 4%. ii. The Notice of 1996 Equitable delivered an SPD, entitled “Equitable Benefits: Retirement Plan” and dated January 1996 (the “1996 Notice”) to participants. The SPD indicated that the interest rate used, which was to be established each year, was “subject to a minimum crediting rate of 4%” and would be the “average of one-year Treasury Bills for the 12-month period ending in November of the prior year.” The SPD stressed that “[fit’s important to note that the interest rates are guaranteed for the entire year,” and included a table of interest rates applied each year since the adoption of the Cash Balance plan, which ranged from 8.5% in 1989 to 5.0% in 1995. G. Practices and Procedures in Delivering Notices Equitable did not have written rules regulating the procedures for distribution of notices of pension plan amendments to the participants and beneficiaries of its plans. Equitable’s Employee Benefit Communications Plan, an inter-executive set of objectives and goals, did not contain a protocol on how written notices should be disseminated to assure that all participants and beneficiaries actually receive advice of plan amendments. Equitable’s executives testified, however, to the practices that were to be followed. Thus, Robert Sjorgren, Vice-President of Employee Benefits, Timothy Collins, Vice-President of Benefit Administration, Kevin Clark, Director of Retirement Plans, and Robert Keane, Vice-President of Executive Benefits, testified that notices of amendments to pension plans, including the notices in question in this lawsuit, were distributed in much the same way as paychecks were distributed, and according to payroll lists. The Benefits Administration Department delivered sufficient copies of the notices, in bulk through Equitable’s inter-office delivery system, to the payroll representative and/or operations manager in each divisional or agency office, more than enough for each individual listed on the payroll in that office. Typically, a cover memorandum accompanied the notices sent by bulk delivery to the divisional and agency offices, identifying the categories of recipients of the contents. (See, e.g., Jt. Trial Exs. 10, 33, Tr. 144). However, based on the testimony of one branch operations manager, it appears that cover memoran-da did not always accompany the bulk deliveries. (See, e.g., Tr. 235, 243, 268). The payroll representative and/or operations manager then distributed the notices to each active payrollee by placing it on his or her desk or in his or her pigeonhole/mail cubby. For those individuals listed as inactive, the payroll system provided a home address, and the Benefits Administration Department sent the notice via first class mail to each inactive payrollee. For those participants receiving long term disability benefits, the Benefits Administration Department obtained home addresses from the third-party administrator, and the payroll representative and/or operations manager was responsible for sending the notice via U.S. mail to each such individual. A number of regional and agency operations managers testified as to the practices they followed. In some offices, the managers took care that the notices were placed in individual cubby holes or on desks, and mailed to individuals temporarily out of the office. In other offices, the mail room itself was responsible for the distribution of bulk mail, sometimes without the intervention or direction of the manager. (E.g., Tr. 156, 171). Some managers indicated that they, as well as their mail rooms, ranked mail into high and low priorities, where unaddressed bulk mail from corporate headquarters was afforded the lower priority. (Tr. 244, 268-71). During busy periods, in some offices, low priority mail would be piled on cabinets for individuals to retrieve at their leisure. III. STANDARD OF REVIEW Both sides have moved for summary judgment, both representing that there are no material issues to be tried. When, previously, after an earlier round of summary judgments, I found triable issues of fact concerning Equitable’s practices and procedures in delivering notices sent to participants, the parties withdrew their motions at my suggestion, and presented witnesses over four days of evidentiary hearings. The parties also consented to my acting as trier of the facts with respect to the issues thus presented, and the motions were then renewed. Thus, I am able to present my findings and conclusions on the record thus enhanced. Summary judgment may be granted if there are “no genuine issues as to any material fact and ... the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). A “genuine issue” of “material fact” exists “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The moving party bears the burden of “informing the district court of the basis for its motion” and identifying the matter that “it believes demonstrate^] the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The burden then shifts to the non-moving party to come forward with competent evidence: When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of the adverse party’s pleading, but the adverse party’s response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If the adverse party does not so respond, summary judgment, if appropriate, shall be entered against the adverse party. Fed.R.Civ.P. 56(e). Although all facts and inferences therefrom are to be construed in favor of the party opposing the motion, Harten Assocs. v. Village of Mineóla, 273 F.3d 494, 498 (2d Cir.2001), that party must raise more than just a “metaphysical doubt” as to a material fact. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). “[M]ere speculation and conjecture is insufficient to preclude the granting of the motion.” Harlen, 273 F.3d at 499. Accordingly, if the “evidence favoring the nonmoving party” “is merely colorable or is not significantly probative, summary judgment may be granted.” Anderson, 477 U.S. at 249-50, 106 S.Ct. 2505 (citations omitted). With regard to the issues of Equitable’s delivery of notices, I function as the trier of facts, finding according to the preponderance of the credible evidence. Fed. R.Civ.P. 52. IV. NOTICE REQUIREMENT A. Law i. Statutory Provisions Section 204(h) of the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1054(h), forbids sponsors of pension plans from significantly reducing the rate of future benefit accruals without proper written notice by the plan administrator to all participants affected by the reduction. The precise text of this statutory requirement has changed over time. The changes are described below. The requirement of notice as a precondition to the effectiveness of amendments was introduced in 1986. See Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), Pub.L. No. 99-272, § 11006, 100 Stat. 82, 243-44 (1986) (codified as amended at 29 U.S.C. § 1054). COBRA amended section 204 of ERISA, 29 U.S.C. § 1054, to prohibit amendment of single employer plans to reduce the rate of future benefit accruals unless each participant and each beneficiary of the plan was given timely notice that set forth the amendment and its effective date. The timeliness of the notice was prescribed; it had to be given after the amendment was adopted and at least fifteen days before the amendment became effective. (h) A single-employer plan may not be amended so as to provide for a significant reduction in the rate of future benefit accrual, unless, after adoption of the plan amendment and not less than 15 days before the effective date of the plan amendment, the plan administrator provides a written notice, setting forth the plan amendment and its effective date, to— (1) each participant in the plan, (2) each beneficiary ..., and (3) each employee organization representing participants in the plan, except that such notice shall instead be provided to a person designated, in writing, to receive such notice on behalf of any person referred to in paragraph (1), (2), or (3). Id. § 11006(a), 100 Stat. at 243. The statutory amendment was applicable to any plan amendments adopted on or after January 1, 1986. Id. § 11006(b), 100 Stat. at 243. Congress, effective June 7, 2001, strengthened and clarified the form of notice that had to be given, so as “to be understood by the average plan participant,” with “sufficient information ... to allow applicable individuals to understand the effect of the plan amendment,” and “within a reasonable time before the effective date of the plan amendment.” Economic Growth and Tax Relief Reconciliation Act of 2001 (“EGTRRA”), Pub.L. No. 107-16, § 659(b), 115 Stat. 38, 139-41 (codified as amended at 29 U.S.C. § 1054(h)). The statutory amendments sought to lengthen the period between the required notice and the plan amendment’s effective date, because the fifteen-day standard “was perceived as often being insufficient.” Prop. Treas. Reg. § 1.411(d)-6, 67 Fed. Reg. 19,713, 19,715 (Apr. 23, 2002). The statutory amendments arose out of particular concern “about the effects of conversion of traditional defined benefit plans to cash balance and hybrid formula plans.” Id. at 19,716 (citing H.R.Rep. No. 107-84, at 266 (2001) (Conf.Rep.), U.S.Code Cong. & Admin.News 2001, p. 46). The Secretary of the Treasury was authorized to issue regulations prescribing the extent of the information that would have to be provided. The statutory text follows: (h)(1) An applicable pension plan may not be amended so as to provide for a significant reduction in the rate of future benefit accrual unless the plan administrator provides the notice described in paragraph (2) to each applicable individual (and to each employee organization representing applicable individuals). (2) The notice required by paragraph (1) shall be written in a manner calculated to be understood by the average plan participant and shall provide sufficient information (as determined in accordance with regulations prescribed by the Secretary of the Treasury) to allow applicable individuals to understand the effect of the plan amendment.... (3) Except as provided in regulations prescribed by the Secretary of the Treasury, the notice required by paragraph (1) shall be provided within a reasonable time before the effective date of the plan amendment. (4) Any notice under paragraph (1) may be provided to a person designated, in writing, by the person to which it would otherwise be provided. (5) A plan shall not be treated as failing to meet the requirements of paragraph (1) merely because notice is provided before the adoption of the plan amendment if no material modification of the amendment occurs before the amendment is adopted. (6)(A) In the case of any egregious failure to meet any requirement of this subsection with respect to any plan amendment, the provisions of the applicable pension plan shall be applied as if such plan amendment entitled all applicable individuals to the greater of— (i) the benefits to which they would have been entitled without regard to such amendment, or (ii) the benefits under the plan with regard to such amendment. (B) For purposes of subparagraph (A), there is an egregious failure to meet the requirements of this subsection if such failure is within the control of the plan sponsor and is— (i) an intentional failure (including any failure to promptly provide the required notice or information after the plan administrator discovers an unintentional failure to meet the requirements of this subsection), (ii) a failure to provide most of the individuals with most of the information they are entitled to receive under this subsection, or (iii) a failure which is determined to be egregious under regulations prescribed by the Secretary of the Treasury. (7) The Secretary of the Treasury may by regulations allow any notice under this subsection to be provided by using new technologies. (8) For purposes of this subsection— (A) The term “applicable individual” means, with respect to any plan amendment— (i) each participant in the plan; and (Ü) any beneficiary who is an alternate payee (within the meaning of section 206(d)(3)(K)) under an applicable qualified domestic relations order (within the meaning of section 206(d)(3)(B)(i)), whose rate of future benefit accrual under the plan may reasonably be expected to be significantly reduced by such plan amendment. (B) The term “applicable pension plan” means— (i) any defined benefit plan; or (ii) an individual account plan which is subject to the funding standards of section 412 of the Internal Revenue Code of 1986. (9) For purposes of this subsection, a plan amendment which eliminates or significantly reduces any early retirement benefit or retirement-type subsidy (within the meaning of subsection (g)(2)(A)) shall be treated as having the effect of significantly reducing the rate of future benefit accrual. EGTRRA § 659(b), 115 Stat. at 140 (codified as amended at 29 U.S.C. § 1054(h)). The statutory amendment was applicable to any plan amendments adopted on or after June 7, 2001. Id. § 659(c), 115 Stat. at 141. ii. Regulatory Provisions Regulations promulgated under section 204(h) clarifying the notice requirement postdate the events in question. Temporary regulations were issued in 1995, and final regulations were issued in 1998 and 2003. The Internal Revenue Service (“IRS”) within the Department of the Treasury issued temporary regulations and published a notice of proposed rulemakings, pursuant to the statutory authority provided in ERISA, on December 15, 1995. See Temp. Treas. Reg. § 1.411(d)-6T, 60 Fed. Reg. 64,320 (1995); Prop. Treas. Reg. § 54.4980F-1, 60 Fed.Reg. 64,401 (Dec. 15, 1995). The temporary regulations were applicable for plan amendments adopted on or after December 15, 1995, and effective on or after January 2, 1996, in order to “assure that the rights of participants in plans subject to section 204(h) of ERISA are protected.” 60 Fed.Reg. at 64,402. The IRS further stated that the issuance of immediate, temporary regulations, without prior notice or comments, was necessary given the “broad range of plan amendments” that give rise to issues under section 204(h), including “amendments prompted by recent changes in law.” 60 Fed.Reg. at 64,320. After notice and comments, final regulations were issued December 14-, 1998, and applied to plan amendments adopted on or after December 12, 1998. Treas. Reg. § 1.411(d) — 6, 63 Fed.Reg. 68,678 (1998). The final regulations issued in 1998 sought to “provide guidance on the requirements of section 204(h)” of ERISA. 63 Fed.Reg. at 68,678. First, the regulations clarified when a section 204(h) notice was required. It specified that an “amendment that affects the rate of future benefit accrual” is one that is “reasonably expected to change the amount of the future annual benefit commencing at normal retirement age.” Id. at 68,681. The regulations encompassed amendments to a wide range of plan provisions, including “the dollar amount or percentage of compensation on which benefit accruals are based” and “the method of determining average compensation for calculating benefit accruals,” but did not affect vesting schedules. Id. Whether the amendment provides for a “significant reduction” was to be determined “based on reasonable expectations taking account the relevant facts and circumstances at the time the amendment is adopted.” Id: The regulations also clarified the mechanisms and substance of compliant notices. The notice could contain a “summary of the amendment, rather than the text of the amendment, if the summary is written in a manner calculated to be understood by the average plan participant.” Id. at 68,682. Delivery of the notice could be effected in “any method reasonably calculated to ensure actual receipt.” Id. The regulations also explained the effects of failure to comply with section 204(h) notice requirements. If the plan administrator made a “good faith effort to comply” or, upon observance of an oversight resulting in failure to provide notice to “no more than a de minimis percentage of participants,” “promptly” provided notice to those participants to whom notice was not provided, the amendment would be effective in accordance with its terms to all participants. Id. at 68,683. Following amendment of section 204(h) in 2001, the IRS published a notice of proposed rulemaking in 2002, Prop. Treas. Reg. § 54.4980F-1, 67 Fed.Reg. 19,713 (Apr. 23, 2002), and, after notice and comments, promulgated final regulations issued April 9, 2003 and effective that same day, Treas. Reg. § 54.4980F-1, 68 Fed. Reg. 17,277 (2003). The regulations seek to “strike a balance between giving participants ... notice long enough in advance to enable them to understand and consider the information before the amendment goes into effect, and allowing employers the ability to effect changes to their plans for business reasons ... within a reasonable time.” 67 Fed.Reg. at 19,715. The IRS noted that the final regulations responded to “particular concern ... expressed about the effects of conversion of traditional defined benefit plans to cash balance or hybrid formula plans.” Id. at 19,716 (citing H.R.Rep. No. 107-84, at 266 (2001) (Conf.Rep.), U.S.Code Cong. & Admin.News 2001, p. 46). The final regulations issued in 2003 gave further guidance in the context of statutory amendments adopted in 2001. First, in response to the statutory change to require notice within a “reasonable time,” the IRS provided that notice should generally be provided at least forty-five days before the amendment’s effective date. 68 Fed.Reg. at 17,283. In response to the statutory amendment requiring a notice “written in a manner calculated to be understood by the average plan participant” and containing “sufficient information ... to allow applicable individuals to understand the effect of the plan amendment,” EGTRRA § 659(b), 115 Stat. at 140 (codified as amended at 29 U.S.C. § 1054(h)), the IRS provided that a notice “must include a [narrative] description of the benefit or allocation formula prior to the amendment, [and] a description of the benefit or allocation formula under the plan as amended.” 68 Fed.Reg. at 17,285. The descriptions were to include “readily compare[able]” terms. Id. at 17,287. For amendments changing from “a traditional defined benefit formula to a cash balance formula,” the notice was required to include “one or more illustrative examples showing the approximate magnitude of the reduction in the examples.” Id. Generally, for “any case in which it is not reasonable to expect that the approximate magnitude of the reduction for each applicable individual will be reasonably apparent from the description of the amendment,” the notice was required to include further information. Id. The regulations specified that, for example, an amendment that converts a defined benefit plan to a cash balance plan credited with variable interest credits must include projections of future interest credits. Id. at 17,825-86. Finally, the 2003 regulations provided for more specific consequences for failure to provide notice, in response to amended statutory language that established consequences for any “egregious failure” to meet the requirements of section 204(h). Specifically, in the case of an egregious failure, “all applicable participants are entitled to the greater of the benefit to which they would have been entitled without regard to the amendment, or the benefit under the