Family of Late UPS Worker Loses Benefits Bid

BOSTON (CN) - UPS was within its contractual rights to deny retirement benefits to the family of a man who died just one week before an annuity's guaranteed payments were set to begin, the First Circuit ruled.

Brian O'Shea, a 37-year employee of UPS, was only a year away from retirement when he was diagnosed with terminal cancer in 2008.

In light of his diagnosis, O'Shea decided to retire at the end of December 2009, and met with a UPS human resources supervisor to set his retirement plans in motion.

However, according to the First Circuit's Sept. 13 ruling, O'Shea never told the company official that he was terminally ill.

As a result, the supervisor gave him the standard advice offered all retiring UPS employees telling O'Shea that he could maximize his time on payroll by taking his seven weeks of accrued vacation and personal time and, thus, delaying his official retirement date.

O'Shea took the supervisor's advice, and submitted his retirement application on January 7, 2010, his last day of work, and indicated that his annuity starting date would be March 1, 2010, the day after his official retirement date of February 28, 2010.

O'Shea selected an annuity plan, naming his four children as beneficiaries.

But there was a catch to all of O'Shea's careful planning. Nowhere in the retirement benefits application and at no time during his conversation with the HR supervisor was it made explicit that surviving to the annuity starting date (March 1, 2010), the day after his official retirement, was a prerequisite to the annuity's payment guarantee.

As a result, wrote U.S. Circuit Judge Ojetta Rogeriee Thompson, "It seems that O'Shea was ... unaware he risked forfeiting the ten years of guaranteed payments to his beneficiaries by delaying his retirement date, especially while

terminally ill."

After filing his paperwork, O'Shea was invited to participate in UPS's special recruitment program, which incentivized early retirement

by offering one year's compensation to select employees in exchange for signing a release of claims and retiring.

O'Shea accepted agreement and received a single pre-tax payment of $98,800. Under the terms of the documents O'Shea signed, the release of claims applied to UPS and "all related companies," including "employee benefit programs (and the trustees, administrators, fiduciaries, and insurers of such programs)."

O'Shea died on Feb. 21, 2010, one week before his official retirement date, and eight days before his annuity starting date.

A month later, the UPS Retirement Plan Administrative Committee sent O'Shea's family a letter denying them payments under the annuity plan.

The O'Sheas appealed the decision, but each time, the retirement plan administrators upheld their earlier decision.

The family sued, but a federal judge in Boston ruled that by participating in the UPS's special recruitment program, O'Shea had released his claims related to the annuity payments.

The First Circuit affirmed that ruling this week, with Judge Thompson writing that while the panel, which included former Supreme Court Justice David Souter, who was sitting by designation, was "sympathetic to the unfortunate and unexpected fallout" resulting from O'Shea's untimely death, it's hands were tied as a result of his waving all claims against UPS and its affiliates, including the retirement plan administrators.

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