The court in Donovan specifically held that ERISA does not require a formal written plan, but rather, covers any employee benefit plan if it is established or maintained by an employer who is engaged in any activity or industry affecting commerce. Id. For example, in Moeller v. Bertrang, 801 F. Supp. 291 (D.S.D. 1992), the South Dakota District Court found that an oral promise by an employer to pay employees with five years of service $1,000.00 for each year worked until their retirement was an ERISA-covered pension plan. The court found that a reasonable person could ascertain the intended benefits and beneficiaries, the source of financing, and plan procedures.
An employer is under no legal obligation to create an employee pension plan — the decision to create one is entirely voluntary — but once a plan is established, ERISA entitles an employee to any vested benefits that arise under the plan. See Moeller v. Bertrang, 801 F. Supp. 291, 293 (D.S.D. 1992) (citing Williams, 927 F.2d at 1543). An employer's promise to pay pension benefits is enforceable under ERISA when the plan pursuant to which the benefits are paid falls within the scope of ERISA's coverage provisions.
To be sure, in some circumstances a parade of early retirement offers might constitute a plan under ERISA — where, for example, employees rely on the promise of future offers. Cf. Moeller v. Bertrang, 801 F. Supp. 291, 294-95 (D.S.D. 1992) (emphasizing the importance of employee reliance on employer promises of future benefits). But this record reveals no such concatenation of circumstances.
In all of the authorities Diak cites, the amount of benefits due or the method of calculating benefits was clear on the face of the record — the only question was whether the plan had been adopted. Hollingshead v. Burford Equipment Co., 747 F. Supp. 1421 (M.D.Ala. 1990) (board minutes establishing pension plan listed schedule of benefits commensurate with year of service); James v. National Business Systems, 924 F.2d at 719 (plaintiff had drafted proposed payment schedule); Moeller v. Bertrang, 801 F. Supp. 291 (D.S.D. 1992) (undisputed that all employees working five years would receive a lump sum at retirement at age 62 of $1000 for each year of service). In this case, DCK's conduct does not indicate that DCK had established a plan with ascertainable benefits.
The informal plan must, however, actually be in existence; the mere decision to create an employee benefit plan is not actionable. James v. National Business Sys., Inc., 924 F.2d 718, 720 (7th Cir. 1991); Moeller v. Bertrang, 801 F. Supp. 291, 293 (D.S.D. 1992). An informal plan may exist independent of, and in addition to, a formal plan as long as the informal plan meets all of the elements outlined in Donovan.
Id. at 1373. In addition, the informal plan must actually be in existence; the mere decision to create an employee benefit plan is not actionable. James v. National Business Sys., Inc., 924 F.2d 718, 720 (7th Cir. 1991); Moeller v. Bertrang, 801 F. Supp. 291, 293 (D.S.D. 1992). An informal plan may exist independent of, and in addition to, a formal plan as long as the informal plan meets all of the elements outlined in Donovan.
The court reasoned, "it is difficult to divine a formula at work in this distribution of payments," contrasting this case with others in which "the amount of benefits due or the method of calculating benefits was clear on the face of the record—the only question was whether the plan had been adopted." Id. (citing James v. National Business Systems, 924 F.2d 718, 719 (7th Cir. 1991) (benefit amount ascertainable from draft proposed payment schedule); Moeller v. Bertrang, 801 F. Supp. 291 (D.S.D. 1992) (undisputed that all employees working five years would receive a lump sum at retirement at age 62 of $1,000 for each year of service); Hollingshead v. Burford Equipment Co., 747 F. Supp. 1421 (M.D. Ala. 1990) (benefit amount ascertainable from board meeting minutes that included schedule of benefits commensurate with years of service).) There are undoubtedly similarities between Diak and this case.
The only cases to which Sarracco points in support of his ERISA claim support Defendants' position that Sarracco has failed to allege the existence of a plan. In Moeller v. Bertrang, 801 F. Supp. 291 (D.S.D. 1992), the court found that an oral promise by an employer to establish a retirement account for employees constituted an ERISA plan. Id. at 294.
The most persuasive evidence that intended benefits of the OOR Retiree Concession Plan are ascertainable is "defendant's payment to [plaintiff]." Moeller v. Bertrang, 801 F.Supp. 291, 295 (D.S.D. 1992) (finding pension plan existed). In this case, for five years a third party administrator, Acordia, was consistently able "to determine the amount" that "concession-eligible persons were eligible to receive."
Even non-traditional ERISA plans can result in ERISA pre-emption. See Moeller v. Bertrang, 801 F. Supp. 291, 298 (D.S.D. 1992). (action against former employer seeking to recover retirement benefits based solely on the employer's oral promise to his employees that such benefits would be payable deemed to be pre-empted by ERISA.)