1 UNITED STATES DISTRICT COURT 2 NORTHERN DISTRICT OF CALIFORNIA 3 4 TIMOTHY SCOTT, et al., Case No. 20-cv-07094-JD

5 Plaintiffs, ORDER RE SUMMARY JUDGMENT v. 6

7 AT&T INC., et al., Defendants. 8

9 On behalf of themselves and a putative class, named plaintiffs Timothy Scott, Patricia 10 Gilchrist, Karen Fisher, Helen Maldonado-Valtierra, Dan Koval, Judy D. Duff,1 John Griffin, 11 Kenneth Rhodes, Judy Dougherty, John Kelly, Richard Walshon, Jennifer Fryer, and Vince 12 Carabba allege that defendants AT&T Inc., the AT&T Defined Benefit Plan, and AT&T Services, 13 Inc. (collectively AT&T) have violated the Employee Retirement Income Security Act of 1974 14 (ERISA),

Stat. 829 (codified as amended at

et seq.). 15 The operative complaint is the third-amended complaint (TAC). Dkt. No. 197. 16 The gravamen of the TAC is that the AT&T Defined Benefit Plan (the Plan) did not 17 calculate and disburse “Joint and Survivor Annuities” (JSA) in a manner consonant with ERISA. 18 Plaintiffs say the Plan failed to treat JSA and Single Life Annuity (SLA) participants in an 19 actuarily equivalent fashion by using “mortality assumptions” that are “fifty years out of date,” 20 which resulted in the “payment of a benefit that is less” than the JSA beneficiaries were entitled to. 21

. 22 The TAC presents four claims against AT&T: Counts I and III allege that the failure to 23 ensure actuarial equivalence violated

(c)(3), 1055(d)(1)(B); Count II alleges an 24 unlawful forfeiture of vested benefits in violation of

(a); and Count IV alleges 25 that AT&T Services breached its fiduciary duties in violation of

(a)(1)(A). Dkt. 26 No. 197 ¶¶ 117-64. The TAC makes these claims on behalf of two putative classes comprised of 27 1 Plan participants (1) who “have not commenced receiving benefits”; and (2) who currently “are 2 receiving a Joint and Survivor Annuity which is less than the value of their Single Life Annuity.” 3

. 4 AT&T asks for summary judgment on all claims. Dkt. No. 153. While AT&T’s motion 5 was pending, plaintiffs were granted leave to amend the complaint to add Fryer and Carabba as 6 representatives of the putative class of Plan participants who have not commenced benefits 7 because Fisher, the prior representative for those individuals, had retired and started receiving JSA 8 benefits. Dkt. Nos. 170, 195, 197. The Court permitted both parties to “file up to 5 pages of 9 supplemental briefing that addresses only new arguments unique to the two newly substituted 10 class representatives.” Dkt. No. 216. This order addresses only those arguments raised in the 11 original round of briefing, Dkt. Nos. 153, 168, 175, and those raised in the supplemental briefs 12 that do not stray beyond the scope of the Court’s order, Dkt. Nos. 218 at 1:1-5:9; 219 at 2:11-5:25. 13 The concurrently filed motions under Federal Rule of Evidence 702, Dkt. Nos. 152, 154, will be 14 addressed in a separate order. 15 The parties’ familiarity with the record is assumed. Summary judgment is denied in main 16 part. 17 BACKGROUND 18 The salient facts are not in material dispute. The Plan is an “employee pension benefit 19 plan” and a “defined benefit plan” under ERISA.

(2)(A), (35); see Dkt. Nos. 20 197 ¶ 64; 153 at 4. The Plan “provides retirement benefit to substantially all U.S. bargained and 21 non-bargained employees of AT&T Inc. and its subsidiaries,” which number in the hundreds of 22 thousands. Dkt. No. 197 ¶ 66. Benefits under the Plan are furnished through fourteen 23 “Component Pension Programs,” each of which has its own rules which may overlap with those of 24 other programs.2

at Table 1; Dkt. Nos. 153-5 (Plan) at Supp. 1. Three of the programs are not 25 at issue. The remaining eleven programs use set conversion factors to calculate JSA benefits, with 26

27 2 AT&T’s briefing suggests there are fifteen Component Pension Programs, Dkt. No. 153 at 4, but 1 some slight variations across the programs that are not material here.3 See Plan §§ 3.1(46)-(47); 2 Dkt. Nos. 153 at 4-5; 168 at 3. Consequently, the Court need not review each of the eleven 3 programs individually.4 4 Plan participants may elect SLA or JSA benefits as options. The SLA benefit is paid over 5 the course of a single person’s life. See Plan § 3.1(99). Under the Plan, “the normal retirement 6 benefit is expressed as an SLA commencing at a participant’s normal retirement age (typically 7 defined as age 65).” Dkt. No. 153-2 (Abraham Rep.) ¶ 16. The JSA benefit is meant to last over 8 the life of two individuals, typically the participant and his or her spouse. The JSA “benefit 9 amount is adjusted downward to reflect the expectation that the payment will be over two lives 10 instead of one,” and that “the Plan will pay out a greater number of monthly payments” for JSAs. 11 Id. ¶¶ 18-19. Because the SLA is the default benefit under the Plan, JSAs are calculated by 12 multiplying the SLA amount by a conversion factor that is based on allocating the survivor, 50- 13 100% of the participant’s benefit.5 See Plan §§ 3.1(46)-(48); Dkt. No. 153 at 5. For example, a 14 Plan participant enrolled in the “AT&T Legacy Bargained Program and the AT&T Legacy 15 Management Program” who elects a Joint and 50% Survivor Annuity “will receive his Pension 16 Benefit as a reduced monthly benefit in an amount equal to [92%] of the amount” of the otherwise 17 payable SLA, and “[a]fter such Participant’s death, his Surviving Spouse will receive a survivor 18 annuity equal to [50%] of the amount payable to such Participant under this Paragraph.” Plan 19 § 3.1(46)(b). If that same participant selected a Joint and 75% Survivor Annuity, they “will 20 receive his Pension Benefit as a reduced monthly benefit in an amount equal to [88.5%] of the 21

22 3 The Court uses the terms “conversion factors” and “tabular factors” interchangeably, as did the parties in their summary judgment papers. 23

4 AT&T cites to the 2013 version of the Plan. See Dkt. No. 153 at 4; Plan at ECF 2. The record 24 elsewhere contains the 2016 version of the Plan. Dkt. No. 119-7. Plaintiffs did not object to AT&T’s reliance on the 2013 version, and neither party suggests there are material differences for 25 present purposes. Consequently, the Court looks to the 2013 version that AT&T proffered in support of its motion for summary judgment. 26

5 Some component programs include “early retirement factors or specify a formula” for reducing 27 benefits if the participant commences their benefits before the normal retirement age. Abraham 1 amount” of the otherwise payable SLA, and their surviving spouse would “receive a survivor 2 annuity equal to [75%] of the amount payable.” Id. § 3.1(47)(b). 3 It is undisputed the Plan does not state where the conversion factors for the JSA benefit 4 calculations came from or how they were selected. In effect, the parties agree they are “black 5 box” factors without a traceable origin. See, e.g., Dkt. Nos. 153 at 10; 168-4 at 47:22-51:8. 6 ERISA does not require an employer to establish an employee benefits plan, or mandate 7 what benefits must be provided if a plan is created. See Lockheed Corp. v. Spink,

, 8 887 (1996). But if an employer establishes a plan, ERISA imposes a comprehensive body of 9 requirements. In pertinent part here, ERISA states that, “in the case of any defined benefit plan, if 10 an employee’s accrued benefit is to be determined as an amount other than an annual benefit 11 commencing at normal retirement age . . . the employee’s accrued benefit . . . shall be the actuarial 12 equivalent of such benefit or amount.”

(c)(3). For present purposes, this means 13 that, if a participant elects an early retirement benefit, the early retirement benefit amounts must be 14 the “actuarial equivalent” of an annuity commencing at normal retirement age. The statute also 15 provides that a “qualified joint and survivor annuity” “means an annuity . . . which is the actuarial 16 equivalent of a single annuity for the life of the participant.”

§ 1055(d)(1)(B). In the context 17 of the Plan, these requirements mean that JSA benefits paid out to the participant and their 18 surviving spouse, whether paid early or at normal retirement age, must be actuarially equivalent to 19 the SLA benefit the participant could otherwise receive. 20 LEGAL STANDARDS 21 The Court “shall grant summary judgment if the movant shows that there is no genuine 22 dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. 23 Civ. P. 56(a). “The moving party bears the initial burden of demonstrating the absence of a 24 genuine issue of material fact.” Broadcom Corp. v. Netflix,

, 882 (N.D. Cal. 25 2025) (citation omitted). Once the movant has curried its burden, the nonmovant “must do more 26 than simply show that there is some metaphysical doubt as to the material facts.”

(quoting 27 Matsushita Elec. Indus. Co. Ltd. v. Zenith Radio Corp.,

(1986)). “To determine 1 favorable to the non-moving party, and draws all justifiable inferences in its favor.” Gabriel v. 2 Cnty. of Sonoma,

, 1071 (N.D. Cal. 2024). “In resolving a summary 3 judgment motion, it is not the Court’s task ‘to scour the record in search of a genuine issue of 4 triable fact.’” Winding Creek Solar LLC v. Peevey,

(N.D. Cal. 2017) 5 (citation omitted), aff’d subnom. Winding Creek Solar LLC v. Peterman,

(9th Cir. 6 2019). 7 DISCUSSION 8 I. ACTUARIAL EQUIVALENCE 9 Summary judgment is denied on Counts I and III with respect to the requirements of 10 actuarial equivalence. See

(c)(3), 1055(d)(1)(B). AT&T says that plaintiffs 11 cannot show the “Plan’s tabular factors are not actuarially equivalent on a pooled basis” because 12 ERISA permits the use of tabular factors for calculating benefits and does not require the use of 13 “reasonable” or “up-to-date” assumptions to generate those tabular factors in this context. Dkt. 14 No. 153 at 11-16. AT&T also says that “actuarial equivalence is viewed as a range” which can be 15 “achieved using different methodologies.”

. AT&T thus reads the “actuarial 16 equivalent” requirements in Sections 1054 and 1055 to be satisfied so long as the JSA benefit 17 amount an individual receives based on the Plan’s chosen conversion factors falls within the 18 “range” of amounts calculated to be equivalent by other reasonable actuarial methods, “regardless 19 of how and when that conversion factor came to be.”

. 20 Plaintiffs say that ERISA does not permit a Plan to choose any assumptions it fancies for 21 the conversion factors so long as the “broken clock is correct twice a day.” Dkt. No. 168 at 18. In 22 plaintiffs’ view, a JSA benefit is the actuarial equivalent of a SLA benefit when it is “determined 23 on the basis of consistently applied reasonable actuarial assumptions.”

. 24 The parties agree that “actuarial equivalent” as used in Sections 1054 and 1055 is a term of 25 art. See Dkt. Nos. 153 at 9; 168 at 8. ERISA itself does not define “actuarial equivalent,” 26 expressly incorporate a definition from elsewhere, or otherwise indicate if the term of art connotes 27 an implicit reasonableness requirement of the sort plaintiffs advance. 1 In this circumstance, the Court “assume[s] Congress intended that term of art to have its 2 established meaning.” Stephens v. U.S. Airways Grp., Inc.,

(D.C. Cir. 2011); 3 see Corning Glass Works v. Brennan,

(1974) (“[W]here Congress has used 4 technical words or terms of art, it is proper to explain them by reference to the art or science to 5 which they are appropriate.” (cleaned up)). The rub is that an established meaning here is not 6 necessarily set in stone. Plaintiffs cite a Department of the Treasury regulation for “qualified 7 trusts” under

(a)(11), which states that “a qualified joint and survivor annuity must 8 be at least the actuarial equivalent of the normal form of life annuity” and that “[e]quivalence may 9 be determined, on the basis of consistently applied reasonable actuarial factors, for each 10 participant or for all participants or reasonable groupings of participants.”

(a)- 11 11(b)(2)(ii); see Dkt. No. 168 at 9. This regulation does not do all the work plaintiffs ask of it 12 because it speaks of “actuarial factors,” not “assumptions.” The regulation does not directly 13 answer the central question of whether the reasonableness is determined by reference to the 14 factor’s assumptions, as plaintiffs aver, or its results, as AT&T would have it. 15 The caselaw does not provide much additional help. Neither party cited an on-point Ninth 16 Circuit decision, and the work of the other federal courts of appeal is not dispositive. In Stephens 17 v. U.S. Airways Group, the D.C. Circuit construed “actuarial equivalent” to mean that “[t]wo 18 modes of payment are actuarially equivalent when their present values are equal under a given set 19 of actuarial assumptions.”

. Stephens did not address whether the “established 20 meaning” of actuarial equivalence requires that the underlying assumptions be reasonable. The 21 Second Circuit has observed that “ERISA [does] not leave plans free to choose their own 22 methodology for determining the actuarial equivalent of the accrued benefit” because such 23 unbounded discretion “could effectively eviscerate the protections provided by ERISA’s 24 requirement of actuarial equivalence.” Laurent v. PricewaterhouseCoopers LLP,

, 25 286 (2d Cir. 2015) (discussing Esden v. Bank of Boston,

(2d Cir. 2000)). But 26 these comments are fairly characterized as dicta that were not essential to independent decisions 27 about other ERISA violations, see Laurent,

; Esden,

, and so are 1 consensus on this issue. See, e.g., Adams v. U.S. Bancorp,

, 748 n.4, 749-50 2 (D. Minn. 2022) (collecting and discussing cases). 3 Even so, plaintiffs have a good point. It does not take a leap of faith to conclude that 4 “actuarial equivalent” would be understood by an actuary skilled in the art to connote the necessity 5 of using reasonable assumptions. See Stephens,

(looking to a publication by the 6 Society of Actuaries to discern the phrase’s “established meaning” as a “term of art”). To that 7 end, plaintiffs have adduced evidence from which a reasonable factfinder could conclude that an 8 actuary would deem two values to be the “actuarial equivalent” of one another only if reasonable 9 assumptions were used. Plaintiffs’ expert, Ian Altman, opined that he “advise[s] [his] defined 10 benefit plan sponsor clients that use of actuarial equivalence factors must at a minimum be current 11 in terms of financial markets and future demographic expectations” based off his decades of 12 experience and training. Dkt. No. 119-8 (Altman Rep.) at 10. Much of an actuary’s training, he 13 said, involves studying “advanced mathematics and statistics,” the “construction of mortality 14 tables,” and “economics and modern portfolio theory to evaluate interest, earnings, and discount 15 rates.” Id. at 8. Altman explained that actuarial training focuses on “setting assumptions” because 16 of the “implicit understanding that underlying conditions change over time.” Id. at 9. 17 Altman also cited the Actuarial Standards of Practice (ASOP), which is guidance published 18 by the Society of Actuaries, as further support of the observation that a practitioner would think it 19 necessary to identify reasonable assumptions before determining actuarial equivalence. See id. at 20 9-10. For example, ASOP No. 27 “provides guidance to actuaries when performing actuarial 21 services that involve selecting assumptions . . . for measuring defined benefit pension plan 22 obligations” and plainly advises that an actuary “should use professional judgment to select 23 reasonable assumptions.” Actuarial Standards Board, ASOP No. 27: Selection of Assumptions for 24 Measuring Pension Obligations §§ 1.1, 3.5 (effective date Jan. 1, 2025). It states that “an 25 assumption is reasonable” if “it is appropriate for the purpose of the measurement,” “it reflects 26 current and historical data that is relevant to selecting the assumption,” “it reflects the actuary’s 27 estimate of future experience, the actuary’s observation of the estimates inherent in market data 1 . . ., or a combination thereof,” and “it is expected to have no significant bias (i.e., it is not 2 significantly optimistic or pessimistic).” Id. § 3.5(a)-(d). 3 ASOPs for other aspects of actuarial practice also emphasize the use of reasonable 4 assumptions. See, e.g., Actuarial Standards Board, ASOP No. 2: Nonguaranteed Elements for 5 Life Insurance and Annuity Products § 3.5 (effective date June 1, 2022); Actuarial Standards 6 Board, ASOP No. 4: Measuring Pension Obligations and Determining Pension Plan Costs or 7 Contributions § 3.8 (effective date Feb. 15, 2023) (citing ASOP No. 27 for “guidance on the 8 selection and assessment of assumptions”); Actuarial Standards Board, ASOP No. 17: Expert 9 Testimony by Actuaries § 3.6 (effective date Dec. 1, 2018) (explaining that an actuary acting in 10 the capacity of an expert witness in a judicial tribunal is “not relieve[d] . . . of the responsibility to 11 comply with the Code, and to use reasonable actuarial assumptions and appropriate actuarial 12 methods”), § 3.8 (“[T]he actuary may refuse to answer hypothetical questions based upon what the 13 actuary believes in good faith to be unreasonable actuarial assumptions.”); see also Actuarial 14 Standards Board, ASOP No. 1: Introductory Actuarial Standard of Practice § 2.10 (effective date 15 June 1, 2013) (noting that the ASOPs will often “call for the actuary to take ‘reasonable’ steps, 16 make ‘reasonable’ inquiries, [or] select ‘reasonable’ assumptions or methods”). 17 Overall, there are material disputes of fact about a reasonable actuary’s understanding of 18 “actuarial equivalence” with respect to underlying assumptions. The record also demonstrates that 19 there are fact disputes about the reasonableness of the assumptions underlying the conversion 20 factors used by the Plan. The undisputed evidence shows both that the relevant conversion factors 21 were “for the most part incorporated into the Plan in 1984 and have not been updated in the 38 22 years since” and that AT&T does not actually how the Plan’s conversion factors came to be or the 23 assumptions (if any) upon which they are based. See, e.g., Altman Rep. at 15-16; Dkt. Nos. 168-4 24 at 47:22-51:8; 168-5 at ECF 2. Altman hypothesizes, and AT&T does not dispute, the factors are 25 “based on the 1971 Group Annuity Mortality table,” which is based on “annuity data collected 26 from 1964-68,” and various interest rates between zero and five percent. Altman Rep. at 16; Dkt. 27 No. 168-2 (Altman Rebuttal Rep.) at 12 n.23. Neither party suggests there is evidence to confirm 1 concerns about the conversion factors being “out of date,” Dkt. No. 168-5 at ECF 2, and Altman 2 opines that, in his experience, a plan which uses static conversion factors for so long without any 3 individualized modulation for beneficiaries is an outlier in the industry, see Altman Rep. at 18. 4 This and related evidence provide a non-speculative basis from which a reasonable factfinder 5 could conclude that the Plan’s conversion factors, and the assumptions on which those factors are 6 based, would not be considered “reasonable” by an actuary exercising his or her professional 7 judgment. See ASOP No. 1 § 2.10 (requirements to “select ‘reasonable’ assumptions” are 8 intended to “call upon the actuary to exercise the level of care and diligence that, in the actuary’s 9 professional judgment, is necessary to complete the assignment in an appropriate manner”). 10 AT&T’s efforts to overcome these factual disputes are unpersuasive. AT&T says that 11 there is no dispute with respect to “the key question in this case is whether the conversion factors 12 produce actuarially equivalent JSA benefits. The assumptions or inputs . . . that were used, if any, 13 to derive a conversion factor are irrelevant to that issue.” Dkt. No. 153 at 10 (emphasis and 14 citations omitted); see also Dkt. No. 175 at 5. To bolster this suggestion, AT&T highlights 15 snippets of deposition testimony from Altman. See Dkt. Nos. 153 at 10:13-15; 175 at 6-8. For 16 example, Altman said that conversion factors “can be derived from interest and mortality 17 tables. . . . They could be selected on a basis that the employer no longer knows what went into 18 them. The relevant question is: When compared to conversion factors generated using reasonable 19 actuarial assumptions, are they greater or equal to those reasonable assumptions.” Dkt. No. 153- 20 15 at 26:2-9. Altman also testified that “the real question is what were the conversion rates and 21 how do they compare to conversion rates that would be generated by reasonable assumptions.” Id. 22 at 236:3-6; see also id. at 206:5-15. 23 The problem for AT&T is that it is not seeing the forest through the trees. Its curated 24 snippets and excerpts overlook the much larger body of Altman’s work, and do not in themselves 25 demonstrate the absence of material factual disputes. Rather, the record as a whole indicates that, 26 although Altman’s opinions may be subject to vigorous cross-examination, they are grounded in 27 evidence and sound methods, and are contrary to AT&T’s arguments in many factual respects. 1 AT&T has not demonstrated that a rational factfinder could not credit the expert evidence on 2 which plaintiffs rely. 3 AT&T says that, as a matter of law, there is no requirement to use reasonable assumptions 4 implicit in Sections 1054 and 1055’s “actuarial equivalent” requirements. AT&T goes too far. 5 The case it principally relies upon, Belknap v. Partners Healthcare System, Inc., see Dkt. No. 153 6 at 15, is readily distinguished. The court there expressly said “it does not appear that ‘actuarial 7 equivalence,’ to the extent it is a term of art in the field, necessarily requires or implies 8 ‘reasonable’ actuarial assumptions,” “[n]either of plaintiff’s experts so testified,” and “it appears 9 that it is industry practice to refer to the plan documents to determine the actuarial assumptions 10 used to calculate an actuarially equivalent benefit.”

, 174-75 (D. Mass. 2022). 11 Not so here, where the record is very different with respect to what constitutes actuarial 12 equivalence in the field. 13 AT&T’s other citations, see Dkt. No. 218 at 5 n.4, are to decisions on motions to dismiss, 14 and so did not involve an evidentiary record like the one before the Court.6 It also bears mention 15 that one decision stated that the plaintiffs “[did] not allege that the industry practice is to apply 16 reasonable assumptions to determine actuarial equivalence.” Drummond v. South. Co. Servs., Inc., 17 No. 23-cv-00174-SCJ,

, at *6 (N.D. Ga. July 30, 2024). Another deemed the 18 plaintiffs’ reliance on ASOPs alone insufficient to establish an understanding in the industry of 19 actuarial equivalence that required the use of reasonable assumptions. See Covic v. FedEx Corp., 20 --- F. Supp. 3d ---,

, at *4 (W.D. Tenn. Sept. 18, 2024). Plaintiffs’ evidence is 21 different in that regard, too. 22 To be sure, these decisions put an emphasis on the observation that Sections 1054 and 23 1055 do not specify “reasonable assumptions,” whereas Congress did include a textual command 24

25 6 AT&T’s citations exceeded the scope of the Court’s supplemental briefing order, see Dkt. No. 216, and so may properly be disregarded, but the Court addresses them in the interest of 26 moving this case along. AT&T also cited McCarthy v. Dun & Bradstreet Corp., Dkt. No. 153 at 15, but that case unremarkably noted that “ERISA does not specifically require that retirement 27 plans periodically adjust their actuarial interest rates” and concluded that the record did not 1 to that effect in other sections of ERISA. See Covic,

, at *3; Drummond, 2024

, at *5; Reichert v. Bakery, Confectionary, Tobacco Workers & Grain Millers 3 Pension Comm., No. 23-cv-12343-SJM,

, at *2 (E.D. Mich. Apr. 17, 2024). 4 The Court declines to conclude that this textual difference is dispositive in the 5 circumstances of this case. In the other sections, Congress specified that certain amounts shall be 6 determined “on the basis of actuarial assumptions and methods each of which is reasonable,” 29 7 U.S.C. § 1085a(c)(3)(A), or “which, in the aggregate, are reasonable,” id. § 1393(a)(1). None of 8 those subsections use the term “actuarial equivalent,” and several of them were enacted years after 9 Congress mandated actuarial equivalence in Sections 1054 and 1055(d). Compare Pub. L. No. 93- 10 406,

, 861 (1974) (creating Section 1054’s “actuarial equivalent” requirement), with 11

Stat. 1101, 1105 (2014) (adding Section 1085a’s requirement that “all 12 costs, liabilities, rates of interest, and other factors under the plan” be calculated based 13 assumptions “each of which is reasonable”). Consequently, they provide no obvious guidance on 14 what “actuarial equivalent” means in Sections 1054 and 1055. Their usefulness here is all the 15 more attenuated because Congress mandated in the other provisions the use of a particular set of 16 reasonable assumptions or methods. See, e.g.,

(g)(3)(A) (specific mortality 17 tables), 1085a(c)(3)(A) (individually reasonable assumptions), 1393(a)(1) (assumptions reasonable 18 in the aggregate). That Congress specified the use of certain reasonable assumptions for other 19 purposes does not indicate that it intended to eliminate a requirement of reasonable assumptions in 20 other parts of ERISA. The understanding of what “actuarial equivalent” means remains a term of 21 art subject to factual disputes about its “established meaning” within the field. See Stephens, 644 22 F.3d at 440. 23 AT&T’s remarks about the use of tabular factors in general and the assessment of 24 equivalence on a pooled versus individual basis do not move the summary judgement needle. See 25 Dkt. No. 153 at 11-16. Plaintiffs may not have proffered evidence establishing “the floor for 26 actuarial equivalence,” id. at 16-20, if actuarial equivalence is assessed solely with an eye to 27 benefit amounts, but that is beside the point because plaintiffs contend that the statutory mandate 1 II. NONFORFEITURE PROVISION 2 Summary judgment is denied on plaintiffs’ nonforfeiture claim, which alleges that the use 3 of unreasonable assumptions led to underpayments under

(a). AT&T says that 4 the nonforfeiture protection do not apply to early retirees because Section 1053 is said to apply 5 “only to ‘normal retirement benefit[s],” and not “early retirement benefits.” Dkt. No. 153 at 20 6 (citation omitted) (alteration in original). 7 The point is not well taken. Insofar as AT&T means to say that individuals who retire 8 early are simply never afforded nonforfeiture protection under ERISA because they retired early, 9 the plain text of Section 1053 makes the trigger for nonforfeiture protections the employee’s 10 “attainment of normal retirement age” not his “[retiring at] normal retirement age.” 29 U.S.C. 11 § 1053(a). AT&T improperly conflates the two concepts. Cf. Contilli v. Local 705 Int’l Broth. of 12 Teamsters Pension Fund,

(7th Cir. 2009). Moreover, as plaintiffs point out, 13 ERISA defines “[n]ormal retirement benefit” to be “the greater of the early retirement benefit 14 under the plan, or the benefit under the plan commencing at normal retirement age.” 29 U.S.C. 15 § 1002(22); see Dkt. No. 168 at 19. This plain language does not support AT&T’s suggestion 16 that, as a categorical matter, Section 1053(a) “does not apply to” individuals “who have 17 commenced benefits payments . . . before normal retirement age.” Dkt. No. 153 at 20-21 18 (emphasis omitted). 19 In a reply brief, AT&T says for the first time that, because plaintiffs “do not argue and 20 have offered no evidence that the JSA payments they receive after retiring early are greater than 21 those they would have received if they retired at age 65,” plaintiffs’ early retirement benefits are 22 not subject to Section 1053’s nonforfeiture protection. Dkt. No. 175 at 12. It cites a regulation 23 stating that, where the benefit “is payable as an annuity in the same form upon early retirement 24 and at normal retirement age, the greater benefit is determined by comparing the amount of such 25 annuity payments.”

(a)-7(c)(2)(i); Dkt. No. 175 at 12. 26 Raising this new contention in a reply was a day late and a dollar short. The Court’s 27 standing order expressly prohibits such sandbagging. See Standing Order for Civil Cases ¶ 15. 1 cv-02266-JD,

, at *4 (N.D. Cal. Mar. 21, 2025) (“[T]he argument was not made 2 in [a party’s] opening brief and is deemed waived.”); see also, e.g., Brown v. Rawson-Neal Psych. 3 Hosp.,

(9th Cir. 2016). 4 III. BREACH OF FIDUCIARY DUTY 5 Summary judgment is granted in favor of AT&T on the breach of fiduciary duty claim. 6 “In every case charging breach of ERISA fiduciary duty . . . the threshold question is not whether 7 the actions of some person employed to provide services under a plan adversely affected a plan 8 beneficiary’s interest, but whether that person was acting as a fiduciary (that is, was performing a 9 fiduciary function) when taking the action subject to complaint.” Pegram v. Herdrich,

(2000); see

(21)(A). Plaintiffs say that AT&T “acted as a fiduciary 11 when, in its absolute discretion, it failed to ensure that the Plan’s conversion factors produced 12 benefits that complied with ERISA.” Dkt. No. 168 at 21. This is said to be so because “[t]he 13 ongoing duty to monitor a plan’s JSA conversion factors and update them if necessary . . . is 14 directly analogous to the ongoing duty to monitor plan investments” previously recognized by the 15 Supreme Court of the United States.

16 But it is well settled that, when a plan sponsor establishes or amends plan terms, “they do 17 not act as fiduciaries, but are analogous to the settlors of a trust.” Hughes Aircraft Co. v. 18 Jacobson,

(1999) (quoting Spink,

). Consequently, AT&T was 19 not acting as a fiduciary under ERISA when it established the use of the challenged conversion 20 factors, and so that conduct cannot support a claim for breach of fiduciary duty. See id. at 443-44; 21 Wright v. Oregon Metallurgical Corp.,

(9th Cir. 2004). So too for 22 AT&T’s decision not to change the conversion factors. The oversight and control of plan terms 23 with which plaintiffs take issue are more analogous to the actions of “the settlors of a trust.” 24 Hughes Aircraft,

(citation omitted). 25 Plaintiffs also say that AT&T breached its fiduciary duties because “it administered the 26 Plan in violation of ERISA’s actuarial equivalence and anti-forfeiture requirements.” Dkt. No. 27 168 at 21. The notion appears to be that the decisions to follow allegedly unlawful Plan terms to 1 plaintiffs do not explain how following clear and mandatory Plan terms for the calculation of 2 benefits is an act which involves the exercise of discretionary authority or control, as is required to 3 be acting as a fiduciary under ERISA. See

(21)(A)(i), (iii). The reliance on Fifth 4 Third Bancorp v. Dudenhoeffer,

, 420-21 (2014), is misplaced. That decision 5 pertained to the duty of prudence under section 1104(a)(1)(B), and the Court’s brief mention of 6 section 1104(a)(1)(D), which requires plan administrators to follow governing plan documents 7 “insofar as such documents . . . are consistent with” ERISA,

(a)(1)(D), does not 8 support the reading plaintiffs presently advance. See also Sec’y of Labor v. Macy’s, Inc., No. 17- 9 cv-541-DRC,

, at *5, 9 (S.D. Ohio Feb. 10, 2022) (concluding the same). 10 IV. PRE-RETIREE STANDING 11 AT&T challenges the standing of named plaintiffs Fryer and Carabba, who currently work 12 at AT&T, are fully vested, and are named as representatives of the putative class of individuals 13 who “have not commenced receiving benefits.” TAC ¶¶ 39-40, 106. AT&T says that Fryer and 14 Carabba’s claimed injuries are too speculative and so not “concrete.” Dkt. Nos. 175 at 14; 218 at 15 1-2; see also Dkt. No. 153 at 22-23. Summary judgment is denied on this ground. 16 Because they seek to invoke federal jurisdiction, plaintiffs bear the burden of showing 17 “(1) an ‘injury in fact’ (2) that is ‘fairly traceable to the challenged conduct of the defendants’ and 18 (3) ‘likely to be redressed by a favorable judicial decision.’” Nat’l Fam. Farm Coalition v. 19 Vilsack,

, 1071 (N.D. Cal. 2024) (citation omitted). “A plaintiff threatened 20 with future injury has standing to sue if the threatened injury is certainly impending, or there is a 21 substantial risk that the harm will occur.” In re Zappos.com, Inc.,

(9th Cir. 22 2018) (internal quotations omitted) (quoting Susan B. Anthony List v. Driehaus,

, 158 23 (2014)). 24 “The elements of standing must be supported in the same ways any other matter on which 25 the plaintiff bears the burden of proof, and so at summary judgment, a plaintiff must set forth by 26 affidavit or other evidence specific facts, which for purposes of the summary judgment motion 27 will be taken as true, that show a substantial probability of standing.” Vilsack, 758 F. Supp. 3d at 1 Dkt. No. 219 at 1; TAC ¶ 19; see also Dkt. No. 119 at 2, the Court “‘need not address standing of 2 each plaintiff’ at this juncture.” Vilsack, 758 F. Supp. 3d at 1072 (quoting Atay v. Cnty. of Maui, 3

(9th Cir. 2016)); see Olean Wholesale Groc. Coop., Inc. v. Bumble Bee Foods 4 LLC,

, 682 n.32 (9th Cir. 2022) (en banc); Nat’l Ass’n of Optometrists & Opticians 5 LensCrafters, Inc. v. Brown,

(9th Cir. 2009). 6 The Court focuses on Fryer’s claimed injury. It is undisputed that Fryer still works for 7 AT&T and so has not elected or commenced her benefits yet. Dkt. No. 219-2 at 9:14-15, 41:7-12. 8 She testified at her deposition that she intends to retire at “[a]pproximately around 55 years old” in 9 “2027” “based on information that [she] had received . . . that if [she] retire[s] earlier than 55, 10 [she] will be penalized in some way and won’t receive as much money as [she] would if [she] 11 were to retire later.” Id. at 40:17-51:2. Fryer has been married to her current spouse since 2021. 12 Dkt. No. 218-2 at 10:6-11. Under the Plan’s terms, the JSA is the default benefit for a married 13 participant, unless he or she “waives the JSA in favor of another form of payment.” Dkt. Nos. 153 14 at 4 (discussing plan terms); Dkt. No. 153-16 at 40:11-17. Fryer repeatedly testified that “as long 15 as [she is] married and have a spouse to potentially survive [her]” she intends to “elect[] the joint 16 and survivor annuity form of benefit.” Dkt. No. 219-2 at 65:9-15; see id. at 65:1-8, 84:20-24; see 17 also id. at 46:21-47:3 (“I specifically want to make sure that my husband is provided for if I were 18 to pass before him, so the joint annuity is more what I’m leaning towards.”). There is no evidence 19 suggesting that the Plan will be amended, or its administration relevantly changed, to vitiate the 20 aspects with which plaintiffs take issue. 21 This record amply establishes a “‘substantial probability’ of standing,” Vilsack,

Supp. 3d at 1071 (citation omitted), because Fryer faces a “substantial risk” of injury, In re 23 Zappos.com,

(citation omitted). AT&T advances a smattering of grounds for 24 concluding otherwise, all of which are unpersuasive. In a rather muddled fashion, AT&T appears 25 to suggest that the amount of time before Fryer retires, approximately two years from now, renders 26 any alleged injury stemming from retirement too speculative. Dkt. No. 218 at 2. It cited no 27 authority for this suggestion, and the Court cannot conclude based on this record that the time 1 particularly because it does not rest on a “speculative multi-link chain of inferences.” In re 2 Zappos.com,

. 3 AT&T says that Fryer’s testimony about intending to elect JSA benefits is just like the 4 “‘some day’ intentions” the Supreme Court has held do not establish injury in fact. Dkt. No. 218 5 at 2 (citing Lujan v. Def. of Wildlife,

(1992)). Not so. The evidence in Lujan 6 showed no more than that the affiants had traveled to the area in question at some point in the past 7 and they wanted to go back at some unknown, indeterminate point in the future. See

563-64. Fryer identified a specific point in the near future, and a particular reason in support 9 thereof, which makes her intent to elect JSA benefits “far more certain than the intent to return to 10 areas visited in the past alleged in [Lujan].” Harris v. Bd. of Supervisors, LA Cnty.,

, 11 762 (9th Cir. 2004). Lujan expressly noted that the evidence there lacked “description[s] of 12 concrete plans” or “specification of when some day will be.”

(emphasis in 13 original); see also Bayer v. Neiman Marcus Grp., Inc.,

(9th Cir. 2017). 14 AT&T next says “it is unknowable right now whether [Fryer] will even be eligible for a 15 JSA at that future date” because she may get divorced or her spouse may pass before her fifty-fifth 16 birthday. Dkt. No. 218 at 3. Such speculation cannot defeat plaintiffs’ evidence. See, e.g., 17 WildEarth Guard. v. U.S. Dep’t of Agric.,

(9th Cir. 2015). It is certainly true 18 that an individual’s short- and long-term fate are never certain, but standing is not measured by the 19 randomness inherent in life. AT&T mentions that Fryer’s two prior marriages ended in divorce, 20 Dkt. No. 218 at 3; 218-2 at 76:5-77:10, in the apparent belief that her current one is doomed. But 21 AT&T overlooks the equally plausible outcome that the third time is the charm. Overall, AT&T 22 traffics in pure guesswork, which is not a reason to find Fryer lacks standing. 23 As a closing point, AT&T says that Fryer lacks standing because she might end up “better 24 off under AT&T’s method” than under plaintiffs’ proposed method of JSA benefit calculation. 25 Dkt. No. 218 at 4. AT&T suggests that “many plan participants are better off using AT&T’s 26 method” in that they receive more money under the current conversion factors than plaintiffs’ 27 proposed alternative. 1 The point may have some impact on class certification, which remains to be seen, but it is 2 not well taken for purposes of individual standing. ERISA grants Fryer the right to sue to “enjoin 3 any act or practice which violates any provision of this subchapter or the terms of the plan, or [] to 4 obtain other appropriate relief [] to redress such violations.”

(a)(3). “ERISA’s 5 core function is to ‘protect contractually defined benefits.’” Wit v. United Behav. Health,

1068, 1082 (9th Cir. 2023) (quoting U.S. Airways, Inc. v. McCutchen,

(2013)); 7 see Dkt. No. 219 at 5. The Ninth Circuit has recognized that ERISA claims can be sustained even 8 in the absence of actual or knowable monetary injury to the plaintiff because of the “material risk 9 of harm to Plaintiffs’ interest in their contractual benefits.” Wit, 79 F.4th at 1082 (emphasis 10 added); see also id. (“Congress intended to make fiduciaries culpable for certain ERISA violations 11 even in the absence of actual injury to a plan or participant.” (quoting Ziegler v. Conn. Gen. Life 12 Ins. Co.,

(9th Cir. 1990))). This reasoning fully applies to Fryer’s non-fiduciary 13 claims. For example, ERISA guarantees Fryer that her JSA benefits will be the actuarial 14 equivalent of SLA benefits under the Plan. “[A]ccept[ing] as valid the merits of [plaintiffs’] legal 15 claims” that her JSA benefits will not be actuarially equivalent because of the use of unreasonable 16 assumptions, FEC v. Cruz,

, 298 (2022), Fryer faces a substantial risk that her JSA 17 benefits will be calculated pursuant to an unreasonable methodology that results in less than she is 18 entitled. See Wit, 79 F.4th at 1083 (“[A]lleged harm further includes the risk that their claims will 19 be administered under a set of Guidelines that impermissibly narrows the scope of their 20 benefits.”). 21 The present unknowability of whether her benefits will be actuarially equivalent is also 22 itself a harm, which “implicates [Fryer’s] ability to make informed decisions” about benefits 23 selection. Id. AT&T says that Fryer “has not consulted a financial advisor about her pension 24 options and has not come to any conclusions at any point.” Dkt. No. 218 at 2 (cleaned up). Yet 25 Fryer testified that she has “concerns about retiring because of the fact that . . . with specific 26 regard to this issue, I want to make sure that, you know, I and my spouse receive what we’re 27 entitled to under the law. So that’s impacting my decision.” Dkt. No. 219-2 at 39:13-19; see also 1 past couple of years in anticipation of retirement.”), 46:5-9. That evidence establishes, or at the 2 least shows there are fact disputes concerning, an impediment to Fryer’s “ability to make informed 3 decisions.” Wit, 79 F.4th at 1083. 4 V. STATUTE OF LIMITATIONS 5 Summary judgment is denied with respect to whether the nonforfeiture and actuarial 6 equivalence claims of retired participants are time barred, without prejudice to AT&T’s raising the 7 question again if warranted by the evidence at trial. The parties agree that, for present purposes, a 8 four-year limitations period applies to plaintiffs’ claims. See Dkt. Nos. 153 at 23; 168 at 23 n.15. 9 Accrual is a question of federal law, and “an ERISA cause of action accrues either at the time 10 benefits are actually denied or when the insured has reason to know that the claim has been 11 denied.” Gordon v. Deloitte & Touche, LLP Grp. Long Term Disability Plan,

, 750 12 (9th Cir. 2014) (citation omitted). Neither party says plaintiffs’ benefits were “actually denied” 13 for purposes of the limitations period. Instead, both focus on whether plaintiffs “had reason to 14 know of their claims.” Dkt. Nos. 153 at 23; 168 at 23-24; 175 at 15. The two claims in question 15 are based on the allegation that the benefits plaintiffs are receiving are not actuarially equivalent 16 because of the use of unreasonable assumptions. 17 “A claimant has a ‘reason to know’ under the second prong of the accrual test when the 18 plan communicates a ‘clear and continuing repudiation of a claimant’s rights under a plan such 19 that the claimant could not have reasonably believed but that his or her benefit had been finally 20 denied.’” Withrow v. Halsey,

(9th Cir. 2011) (citation omitted). The sole 21 basis AT&T advances for finding in its favor is that plaintiffs “had reason to know of their claims 22 at least as early as their commencement of benefits because their claims concern the value of 23 annuity benefits written directly into the Plan and disclosed to each Plan participant in 24 communications laying out the relative value of the available forms of benefit.” Dkt. No. 175 at 25 15; see also Dkt. No. 153 at 23-24. The evidence on which AT&T relies does not establish that 26 plaintiffs had “reason to know” their claims were denied at the time they commenced benefits, and 27 so the defense fails at this juncture. 1 As AT&T notes, the Plan, with which plaintiffs were provided a copy, lists out the 2 conversion factors used for calculating JSA benefits. Plan §§ 3.1(46)-(48). But the Plan does not 3 disclose the assumptions on which the factors were based. And there is no evidence that either the 4 named plaintiffs or the average participant would have been able to reverse engineer the possible 5 assumptions on which the factors were based in the way Altman and AT&T’s actuaries did. The 6 “individualized Pension Modeling Statement” each plaintiff was given by AT&T, Dkt. No. 153 at 7 6 (discussing evidence), did contain “Relative Value” notices that AT&T says “provided specific, 8 detailed explanations to each Plaintiff of the comparative values of their available forms of 9 benefit.” Id. at 23-24; see, e.g., Dkt. Nos. 153-9 at 0057-59; 153-27 at 9170; 153-29 at 9234-35. 10 AT&T concedes these notices presented relative values using assumptions which are not those 11 upon which the Plan’s JSA conversion factors are most likely based. See Dkt. Nos. 153 at 6-7; 12 153-22 at 179:25-180:14. 13 The notices disclosed that their calculations “may utilize different interest rate(s) as 14 defined by the Program,” but the notices said nothing about other possible assumptions (mortality 15 tables). E.g., Dkt. Nos. 153-9 at 0057; 153-29 at 9233. The notices directed participants to “call 16 the Fidelity Service Center” if they “would like additional information regarding the life 17 expectancy (mortality tables) and interest rate assumptions used.” E.g., Dkt. Nos. 153-27 at 9169; 18 153-29 at 9233. But AT&T does not say how that information, even if the named plaintiffs did 19 reach out, would have given them notice of facts about the Plan’s conversion factors and the 20 assumptions on which they are based. Finally, AT&T does not explain, or adduce evidence to 21 show, how plaintiffs would have “recognize[d] that the disparity” between the conversion factors 22 and the relative value notice “had some significance worth further investigation.” Osberg v. Foot 23 Locker, Inc.,

(2d Cir. 2017). 24 In effect, AT&T says the retired plaintiffs should have pieced all this together as forensic 25 ERISA analysts and so could not have reasonably believed but that their benefits had been denied. 26 Dkt. No. 153 at 23. But ERISA does not demand or expect of participants such “a heroic chain of 27 deductions.” Osberg,

. AT&T certainly did not cite any authority imposing so a 1 plainly worlds away from those in which the Ninth Circuit has found a plaintiff “had reason to 2 || know” his claim was denied. See Withrow,

(summarizing and distinguishing 3 Chuck v. Hewlett Packard Co.,

(9th Cir. 2006)). 4 The out-of-circuit authority on which AT&T does rely is materially distinguishable. Dkt. 5 || No. 153 at 24. In Miller v. Fortis Benefits Ins. Co., the Third Circuit held that the plaintiff's claim 6 || accrued “upon his initial receipt of the erroneously calculated award” on the ground that the 7 “repudiation should have been clear to him upon initial receipt of payment . . . [because] a simple 8 || calculation of sixty percent of his salary should have alerted him that he was being underpaid.” 9 |}

(3d Cir. 2007). The alleged issue with named plaintiffs’ JSA benefits here is 10 || far more complex than merely comparing two benefit amounts or completing simple 11 multiplication, and other federal courts have recognized the significance of that distinction for 12 limitations purposes. See, e.g., Faciane v. Sun Life Assur. Co. of Canada,

, 422 5 13 (5th Cir. 2019) (finding the alleged underpayment was “more similar [to] the percentage-of- 14 || earnings calculation at issue in Miller? because plaintiff did not “need to decipher complex 3 15 formulae or piece together inferences from incomplete information”); Osberg,

; a 16 Kifafi v. Hilton Hotels Ret. Plan,

(D.C. Cir. 2012) (noting the issue required 3 17 “apply[ing] complex law to complex facts” and “it makes no sense to ask the participants to 18 || navigate the complexity of ERISA’s anti-backloading provision immediately upon receipt of their 19 first benefits payment”); Novella v. Westchester Cnty.,

(2d Cir. 2011). 20 CONCLUSION 21 Summary judgment is granted in favor of AT&T on Count IV of the TAC for breach of 22 || fiduciary duty. It is denied in all other respects. 23 IT IS SO ORDERED. 24 Dated: July 9, 2025 25 JAM ONATO 26 Uniteff States District Judge 27 28