Wise v. El Paso Natural Gas Co.

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_____________________

No. 92-8125
_____________________

GEORGE G. WISE, et al.,

Plaintiffs-Appellants,

versus

EL PASO NATURAL GAS COMPANY,

Defendant-Appellee.

_______________________________________________________

Appeal from the United States District Court
for the Western District of Texas
_______________________________________________________

Before WILLIAMS, HIGGINBOTHAM and BARKSDALE, Circuit Judges.

JERRE S. WILLIAMS, Circuit Judge:

Plaintiffs appeal from the district court's grant of summary

judgment in favor of their former employer, El Paso Natural Gas

Company (which, along with its successors in interest, we refer

to as "El Paso"). In October 1985, El Paso informed its workers

that anyone who retired after a specified cut-off date would no

longer have their health insurance paid by the company.

Plaintiffs, upset that they "must devote a substantial portion of

what was anticipated to be disposable retirement income to pay

escalating health insurance premiums," argue that El Paso is

contractually bound to provide their health insurance. They also
maintain that under the Employment Retirement Income Security Act

of 1974, 29 U.S.C. §§ 1001-1461 ("ERISA"), the company is

statutorily obliged to do so. The district court disagreed as to

both assertions. It concluded that El Paso had no statutory or

contractual obligation to continue post-retirement benefits and

was free to eliminate paid coverage. We affirm.

I. FACTS AND PRIOR PROCEEDINGS

The underlying facts of this important case are uncontested.

Plaintiffs are long-time employees of El Paso. In 1959, fifteen

years before the enactment of ERISA, El Paso began providing

comprehensive medical insurance to its retirees. From that date,

the post-retirement medical plan (the "Plan") has been governed by

a series of underlying insurance policies or plan documents which

expressly grant El Paso the unilateral authority to modify or

terminate coverage at any time. El Paso has modified the Plan many

times, choosing both to decrease and increase benefits. From 1959

through 1976, the benefits plan was described in informal documents

such as brochures and handbooks.

Upon ERISA's effective date in 1977, El Paso began to spell

out the Plan's various rights and benefits in formal Summary Plan

Descriptions ("SPDs").1 Twice in 1977 and again in 1980, El Paso

1
ERISA mandates that every plan participant be given an
SPD, which "shall be written in a manner calculated to be
understood by the average plan participant, and shall be
sufficiently accurate and comprehensive to reasonably apprise
such participants and beneficiaries of their rights and

2
prepared and distributed to eligible participants editions of the

statutorily-mandated SPD. All three versions of the SPD are

identical for purposes of the instant case and contained the

following passage, from which Plaintiffs glean a promise of

infinite duration: "Upon retirement, you, your spouse, and

eligible children under 19 years of age are automatically insured

for retirement health care benefits and the Company pays the entire

cost." None of these SPDs expressly addressed El Paso's

reservation of the right to amend or terminate the Plan's benefit

provisions, but they advised readers to consult the Plan's official

text for complete information.2

In December 1983, Burlington Northern, Inc. acquired El Paso,

and, following a transition period, began to provide through its

own plans the benefits flowing to El Paso's active workers and

retirees. Unlike the parent company and Burlington's other

subsidiaries, however, El Paso continued to pay the full cost of

its retirees' insurance. A new disclosure rule floated by the

Financial Accounting Standards Board, however, dramatically altered

the situation. The proposed requirement, that employers must

reflect on their balance sheets the present value of the estimated

obligations under the plan." 29 U.S.C. § 1022(a)(1).
2
El Paso contends that the plaintiffs did not rely upon the
1977 and 1980 SPDs in the district court but rely on them for the
first time on appeal. We conclude, however, that sufficient
reference was made to these documents in the district court that
the plaintiffs are not precluded from asserting their relevance
on appeal.

3
future costs for retirees' medical benefits, portended a serious

impact on Burlington's financial statements and prompted Burlington

to commission an actuarial analysis of how the rule might shape its

recorded liabilities. See Financial Accounting Standards No. 106:

Employers' Accounting for Postretirement Benefits Other Than

Pensions (1990).3

According to El Paso's motion for summary judgment, the new

balance sheet liability and annual expenses were conservatively

estimated to be "significantly greater than . . . for all of the

other Burlington-held companies added together." Under the heading

LEGAL CONSIDERATIONS, the actuarial report noted a recent pro-

retiree court ruling and evinced concern that El Paso's pre-1985

SPDs, unlike Burlington's, may have failed to include language

3
The new and much-publicized accounting rule, which
ultimately took effect December 15, 1992, requires employers to
adopt accrual accounting to expense accumulated benefits during
employees' working careers rather than the past practice of
waiting until the benefits are actually paid. While the change
does not represent reductions in cash flow, it dramatically
erodes estimates of net worth and pre-tax earnings as employers
recognize the present value of projected post-retirement
benefits.
El Paso is not alone in its strong response; FASB 106 has
combined with other factors to redden the financial statements of
many companies, particularly those providing generous benefits.
See, e.g., Robert L. Rose, Chilly Sunset: Firms' Attempts to Cut
Health Benefits Break Calm of Retirement, THE WALL STREET JOURNAL,
Febr. 24, 1993, at A1 (chronicling the jarring impact on various
companies and their employees, and the firms' sober responses);
Vineeta Anand, INVESTOR'S BUSINESS DAILY, Oct. 2, 1992, at Executive
Update; Benefits, 4 (same); Lee Berton and Robert J. Brennan,
Some Companies Use Subtle Methods To Curb the Cost of Retiree
Benefits, THE WALL STREET JOURNAL, Febr. 24, 1993, at A14 (detailing
the novel, blow-softening responses of several companies).

4
authorizing unilateral amendment and/or termination.4 Thus, in

March and June 1985, El Paso began to lay the groundwork for future

changes by issuing new SPDs which, for the first time, included the

following language under the heading "OTHER IMPORTANT INFORMATION":

The Company reserves the right to alter, amend, delete,
cancel or otherwise change the plan or any of the
provisions of the plan at anytime [sic]. If the plan is
terminated, coverage for you and your eligible family
members will end.

A few months later, in October 1985, El Paso exercised that

reserved right when it announced that it would continue to extend

benefits only for employees who retired on or before March 1, 1986;

anyone retiring after that designated cut-off date would forfeit

company-paid coverage.5

4
Apparently, the report was referring to the class action
case, Eardman v. Bethlehem Steel Corp. Employee Welfare Benefit
Plans, the approved settlement of which is cited at 607 F. Supp.
196, 215-17 (W.D.N.Y. 1985). In Eardman, retired workers
contested reductions in their benefits on the ground that the
plan documents had not reserved the right to amend. The district
court had earlier found for the workers. Id. at 196-215
(W.D.N.Y. 1984). The opinion approving the settlement recognized
the risk of reversal as one basis for approval.
In light of a recent article examining the implications of
FASB 106, the report's concerns proved to be prescient: "Experts
say that employers should also examine the legal implications.
For example, employers may be unable to alter plans unilaterally
if they have not specifically retained that right and put
retirees on notice that the plan could be changed." New
Accounting Rule for Retiree Benefits Will Force Employers to
Change Practices, BNA PENSIONS & BENEFITS DAILY (Nov. 4,
1992)(emphasis added).
5
Of special note is the fact that El Paso, while ceasing to
provide free benefits for employees retiring after March 1, 1986,
has nonetheless continued to maintain its Plan and to cover post-
March 1986 retirees. The record reflects the following:

Under the Plan, post-March 1986 retirees are provided,
at their own cost, (i) a number of benefits that would
not be readily available to them in insurance contracts

5
 On behalf of himself and other Plan participants, all of whom

retired between October 1986 and August 1989, George G. Wise

initiated this action in state court to contest El Paso's refusal

to pay for their post-retirement health coverage under the Plan.

Wise alleged a variety of state common law claims, including breach

of contract, negligence, and breach of the duty of good faith and

fair dealing. El Paso removed the action to federal court on the

basis of ERISA preemption. See 29 U.S.C. § 1144(a). The parties

now seem to agree that the instant suit is one to enforce the terms

of an employee benefit plan under 29 U.S.C § 1132(a)(1)(B).6 On

March 10, 1992, the district court granted El Paso's motion for

summary judgment. Plaintiffs timely appealed.

II. DISCUSSION

A. Standard of Review

Although it is a "comprehensive and reticulated statute,"

Nachman Corp. v. Pension Benefit Guaranty Corp., 446 U.S. 359, 361,

and (ii) benefits at group rates significantly better
than they could acquire as individuals in the open
market. In addition, (iii) EPNG pays the full
administrative costs of the Plan, including the portion
of such costs related to post-March 1986 retirees.
6
29 U.S.C. § 1132(a)(1)(B) provides:

A civil action may be brought --
(1) by a participant or a beneficiary -- * * *
(B) to recover benefits due him under the
terms of his plan, to enforce his rights
under the terms of the plan, or to clarify
his rights to future benefits under the terms
of the plan.

6
100 S.Ct. 1723, 1726, 64 L.Ed.2d 354 (1980), ERISA fails to set out

the applicable standard of review for actions under § 1132(a)(1)(B)

challenging benefit eligibility determinations. The Supreme Court

has filled the gap. We review de novo § 1132(a)(1)(B) actions

challenging denials of benefits where the benefit plan fails to

give the administrator or fiduciary discretionary authority to

determine eligibility for benefits or to construe the plan's terms.

Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct

948, 956, 103 L.Ed.2d 80 (1989). In this case, neither party has

pointed to any Plan provision that expressly grants El Paso, the

Plan's administrator, discretionary authority regarding

entitlements. Accordingly, the district court's decision will be

tested under the broader de novo standard. See Schultz v.

Metropolitan Life Ins. Co., 872 F.2d 676, 678 (5th Cir. 1989).

B. El Paso's Right to Amend and Terminate Coverage

We are spared a significant inquiry. As mentioned above,

neither party disputes that the arrangement in question falls

within ERISA's statutory definition of an "employee welfare benefit

plan":

[A]ny plan, fund, or program . . . maintained by an
employer . . . to the extent that such plan, fund, or
program was established or is maintained for the purpose
of providing for its participants or their beneficiaries
. . . (A) medical, surgical, or hospital care or
benefits[.]"

29 U.S.C. § 1002(1).

Indeed, the Plan fits easily within the Act's broad coverage. See

generally Id. at § 1002; see, e.g., Meredith v. Time Ins. Co., 980

7
F.2d 352, 354-57 (5th Cir. 1993)(explicating ERISA's various

definitional provisions).

1. ERISA's statutory requirements

It is undisputed that nothing in ERISA requires an SPD to

reference amendment rights or procedures. While Plaintiffs concede

that an SPD need not specify that it is subject to amendment,7 they

cite 29 U.S.C. § 1022(b), which requires an SPD to state the

"circumstances which may result in disqualification, ineligibility,

or denial or loss of benefits." The gravamen of Plaintiffs'

complaint is this: because § 1022(b) requires an employer to warn

participants of possible decreases in their benefits, El Paso "was

not free to amend the plan if the amendment caused a loss of

benefits." (emphasis in original). Under the SPD heading,

"TERMINATION OF BENEFITS AND CONVERSION PRIVILEGES," El Paso listed

three triggering events that would terminate a retiree's insurance:

(1) death of the retiree; (2) remarriage of a surviving spouse; and

(3) a dependent child reaching the age of 19. Plaintiffs leap upon

this seeming exclusivity:

This language does not state, or even indirectly imply,
that the coverage will be terminated for any other
reason. . . . [The pre-1985 SPDs] indicate three, and
only three, instances in which such coverage will end .
. . . Neither document in any way directly or indirectly
reserves any right to alter, amend, modify or change the
policy. (emphasis in original).

7
The plaintiffs acknowledge that the underlying plan
documents, as distinguished from the 1977 and 1980 SPDs,
expressly set forth the company's right to modify the plan.

8
 In sum, since the earlier SPDs failed to meet § 1022(b)'s

disclosure requirement by including the possibility of unilateral

amendment or termination, Plaintiffs insist that El Paso is

estopped under ERISA from abolishing free, lifetime coverage.

The district court disagreed, pointing to the Plan itself and

to the SPDs issued in 1985, all of which reserved to El Paso the

unqualified right to alter or eliminate coverage. From this, the

court concluded that "[r]etired employees such as the Plaintiffs in

this case cannot claim entitlement to employer paid health benefits

in perpetuity where the plan itself and the SPD make it clear that

those benefits can be amended, modified, or even terminated at any

time." Upon a review of applicable caselaw, we agree with the

district court.

(a) no vesting

Congress has conspicuously chosen to exempt welfare

benefit plans from the full breadth of ERISA's extensive

requirements. Compare 29 U.S.C. § 1002(2)(A) with § 1002(1)

(distinguishing "employee pension benefit plans" from "employee

welfare benefit plans"). Welfare benefits such as medical

insurance, which may be ancillary to but are not part of a pension

plan, are not subject to the rather strict vesting, accrual,

participation, and minimum funding requirements that ERISA imposes

on pension plans. See 29 U.S.C. §§ 1051 et seq. and §§ 1081 et

seq. Accordingly, this Court and every other Circuit Court that

9
has considered the question agree that "ERISA simply does not

prohibit a company from eliminating previously offered benefits

that are neither vested nor accrued." Phillips v. Amoco Oil Co.,

799 F.2d 1464, 1471 (11th Cir. 1986), cert. denied, 481 U.S. 1016,

107 S.Ct. 1893, 95 L.Ed.2d 500 (1987); see, e.g., McGann v. McGann

Music Co., 946 F.2d 401, 405-07 (5th Cir. 1991), cert. denied sub

nom. Greenberg v. H & H Music Co., -- U.S. --, 113 S.Ct. 482, 121

L.Ed.2d 387 (1992); Adams v. Avondale Industries, Inc., 905 F.2d

943, 947-49 (6th Cir.), cert. denied, -- U.S. --, 111 S.Ct. 517,

112 L.Ed.2d 529 (1990).

The disparate treatment accorded welfare plans is not

accidental; indeed, its underlying rationale is highly pertinent to

our decision today. In a similar case involving retirees who

challenged their employer's decision to modify unilaterally its

benefits plan, the Second Circuit explained:

With regard to an employer's right to change medical
plans, Congress evidenced its recognition of the need for
flexibility in rejecting the automatic vesting of welfare
plans. Automatic vesting was rejected because the costs
of such plans are subject to fluctuating and
unpredictable variables. Actuarial decisions concerning
fixed annuities are based on fairly stable data, and
vesting is appropriate. In contrast, medical insurance
must take account of inflation, changes in medical
practice and technology and increases in the costs of
treatment depending on inflation. These unstable
variables prevent accurate predictions of future needs
and costs.

Moore v. Metropolitan Life Ins. Co., 856 F.2d 488, 492 (2d Cir.
1988).

10
 We do not have the power to assume the legislator's role and

welcome additional layers of obligations. The provision must be

read in the light of ERISA's sweeping complexity. This is clearly

not a case of inadvertent omission. In such cases of deliberate

legislative inaction, the Supreme Court has issued a valuable

admonition: "[L]egislative silence is not always the result of a

lack of prescience; it may instead betoken permission or, perhaps,

considered abstention from regulation. In that event, judges are

not accredited to supersede Congress or the appropriate agency by

embellishing upon the regulatory scheme. Accordingly, caution must

temper judicial creativity in the face of legislative or regulatory

silence." Ford Motor Credit Co. v. Milhollin, 444 U.S. 555, 565,

100 S.Ct. 790, 797, 63 L.Ed.2d 22 (1980).

Since an employee's interest in such benefits is not

statutorily vested, El Paso is under no continuing obligation to

provide them under ERISA. It possesses the right to amend or

terminate coverage at any time. Section 1022(b) relates to an

individual employee's eligibility under then existing, current

terms of the Plan and not to the possibility that those terms might

later be changed, as ERISA undeniably permits.

(b) can change with notice

Against this established law, two recent opinions

from this Court interpreting ERISA's notification provisions posed

11
similar disclosure issues and support our decision today. In

Whittemore v. Schlumberger Technology Corp., 976 F.2d 922 (5th Cir.

1992), plaintiffs were former Schlumberger employees who sought

severance pay under a provision of the company's policy manual that

provided for such pay in lieu of notice of termination. A December

1988 amendment, however, had revoked that practice if employees

were terminated within a prescribed time and offered full-time

employment by a company acquiring the Schlumberger division in

which the employees worked. In Whittemore, the amended severance

plan, a welfare benefit plan under ERISA, became effective before

plaintiffs' division was sold to another company. Although

admitting that the amendment "technically occurr[ed] before the

employees' termination," Plaintiffs argued vigorously that

Schlumberger violated ERISA by failing fully to disclose the terms

of the amendment prior to the employees' discharge. In an analysis

applicable to the instant case, we observed:

Even if this concession [that the amendment occurred
prior to termination] were not enough, the district court
specifically found that Schlumberger complied with
ERISA's disclosure requirements in that "plaintiffs admit
receiving copies of the amended severance . . . plan on
February 7, and admit receiving a summary description of
this plan change on March 8, 1989." The plaintiffs do
not dispute these facts.

The plaintiffs acknowledge that Schlumberger gave
notice within the time permitted by ERISA. They argue
only that "such a technical reading of the disclosure
provisions . . . work [sic] an inequitable result and
give [sic] effect to form over substance." We conclude,
to the contrary, that Schlumberger was entitled to give
notice within the statutory notice period and was not
required to provide it sooner. The plaintiffs' argument
is without merit.

Id. at 923-24 (emphasis added).

12
 The instant plaintiffs concede that they received the revised

SPDs prior to El Paso's termination. Moreover, El Paso provided a

reasonable window during which eligible employees could choose to

retire with full, company-paid coverage. El Paso's workers, like

those in Whittemore, were placed on notice, however perfunctory,

that retirement after the prescribed date would result in the

forfeiture of free coverage.

Our recent decision in Godwin v. Sun Life Assurance Co. of

Canada, 980 F.2d 323 (5th Cir. 1992), decided after arguments in

the instant case, also concerned ERISA's disclosure requirements.

In Godwin, the plaintiff contended that an amendment to his welfare

benefit plan was inapplicable to him because he had never received

personal notice of the amendment. Although Sun Life issued updated

SPDs following each amendment to the plan, Godwin maintained that

his nonreceipt of notice of the change rendered it invalid as to

him. Framing the issue as whether the plan sponsor complied with

the ERISA requisites for plan modifications with respect to Godwin,

we held:

We agree with the district court that an amendment
to a welfare benefit plan is valid despite a
beneficiary's lack of personal notice, unless the
beneficiary can show active concealment of the amendment,
Blau v. Del Monte Corp., 748 F.2d 1348, 1352 (9th Cir.),
cert. denied, 474 U.S. 865, 106 S.Ct. 183, 88 L.Ed.2d 152
(1985), [footnote omitted], or "some significant reliance
upon, or possible prejudice flowing from" the lack of
notice. Govoni v. Bricklayers, Masons and Plasterers
Int'l Local No. 5 Pension Fund, 732 F.2d 250, 252 (1st

13
 Cir. 1984). Here, there is no evidence of active
concealment, and Godwin can show neither significant
reliance nor prejudice from his alleged lack of notice.
(footnote omitted).

Id. at 328.

In the instant case, Plaintiffs' assertions are weaker than

Godwin's. They cannot dispute that they received personal and

unambiguous notice of the prospective change months before it

became effective. El Paso concedes that the SPDs could possibly

suggest an "arguable commitment" to continue coverage for workers

retiring before the effective date and points out that it has in

fact extended post-retirement insurance to such retirees. The

instant plaintiffs, however, are asking us to do what neither

Congress nor any other court has ever done -- impose vesting for

employees who had not retired as of the date of the disputed

change.

Plaintiffs complain strenuously that no pre-1985 SPDs

contained the amendment/termination language. This omission, they

insist, is tantamount to a promise to maintain post-retirement

health care: "If the SPD's . . . contain such a promise, EPNG must

honor its commitment and cannot avoid that obligation, even by

amending its plan documents." We do not agree, particularly when

(1) ERISA does not mandate the inclusion within SPDs of amendment

rights or procedures and (2) any pre-1985 silence is followed by an

unequivocal statement to the contrary. El Paso's failure to

include that which ERISA does not require cannot act to prejudice

14
El Paso by imposing an infinite duty. Although Plaintiffs

acknowledge that it is "technically true" that amendment procedures

and rights need not be included in the SPD, they insist that when

amendments compromise benefits previously offered, they must be

precluded under § 1022(b). This argument is fanciful. Plaintiffs

must concede that amendments, almost by definition, do not always

herald pro-beneficiary news. The average plan participant must

realize that amendments to welfare benefit plans are not enacted

for the sole purpose of augmenting benefits, but often to diminish

them as well.

We are sensitive to Plaintiffs' earnest concerns and realize

that today's decision works a significant hardship on workers who

have invested, in many cases, most of their lives in service to the

company. Across the nation, companies faced with rapidly rising

costs and worried about their competitiveness are paring retiree

benefits that were once considered sacrosanct. But ERISA simply

does not grant employees unfettered rights to the corporate

treasury. Employers need not abandon prudent business behavior

when marketplace forces compel them to rethink earlier offers of

contingent, non-vested benefits. In light of today's spiraling

health care costs, cutbacks in government-sponsored health care

coverage (Medicare), and our ever-aging population, Congress may

enact changes. But the current ERISA requires no more.

15
 2. Contractual Vesting?

There remains the question whether the instant dispute

can be recognized as a contract case, rather than a statutory one.

Plaintiffs urge this interpretation, insisting that even if ERISA

does not provide a statutory bar to El Paso's actions, the company

has incurred contractual obligations beyond ERISA to provide free,

lifetime coverage.

We held above that although ERISA includes elaborate vesting

requirements for pension plans, see 29 U.S.C. § 1053, "it does not

require that welfare plan benefits 'vest' or that an employer

maintain them at a certain level." Vasseur v. Halliburton Co., 950

F.2d at 1002, 1006 (5th Cir. 1992); see also McGann, 946 F.2d at

405. Although ERISA generally allows employers to modify or

discontinue such plans at will so long as the procedure followed is

consistent with the plan and the Act, we have held that an

employer's welfare plan itself may designate a vested benefit. In

Vasseur we stated: "An employer can oblige itself contractually to

maintain benefits at a certain level in ways that are not mandated

by ERISA." 950 F.2d at 1006. See also, e.g., In re White Farm

Equipment Co., 788 F.2d 1186, 1193 (6th Cir. 1986).

It follows that El Paso could have waived its statutory right

to modify or terminate benefits and vested its workers

contractually with the right to receive free lifetime coverage. We

16
cannot find such an obligation, however, anywhere in the record in

this case. Such extra-ERISA commitments must be found in the plan

documents and must be stated in clear and express language.

Neither the particular terms of El Paso's master policy nor its

pre-1985 SPDs come close to encompassing such a binding pledge.

See, e.g., Alday v. Container Corp. of America, 906 F.2d 660, 665

(11th Cir. 1990)("[A]ny retiree's right to lifetime medical

benefits at a particular cost can only be found if it is

established by contract under the terms of the ERISA-governed

benefit plan document.")(emphasis added), cert. denied, -- U.S. --,

111 S.Ct. 675, 112 L.Ed.2d 668 (1991); In re White Farm Equipment

Co., 788 F.2d at 1193 ("[T]he parties may themselves set out by

agreement or by private design, as set out in plan documents,

whether retiree welfare benefits vest, or whether they may be

terminated.") (emphasis added).

El Paso's plan documents and SPDs describe the extent of

benefits provided under the Plan; they make no reference to a

vesting of such benefits. El Paso's statement in the pre-1985 SPDs

that "[u]pon retirement, you . . . are automatically insured for

retirement health care benefits and the Company pays the entire

cost" discussed what the Plan then provided, not whether it would

be offered in perpetuity. As to yet-unretired workers, no

commitments were made. Nowhere does the SPD contain specific

language establishing a vesting of health benefits. If precise

language denying the right to withdraw benefits had been included,

17
such language would be contractually controlling. See Bryant v.

International Fruit Products Co., Inc., 793 F.2d 118, 123 (6th

Cir.)("An agreement that provides that an act can occur in no event

and under no circumstances cannot be converted into one that

permits the act by a series of amendments that first deletes the

reference to the prohibition and then adds a provision permitting

the forbidden act."), cert. denied, 479 U.S. 986, 107 S.Ct. 576, 93

L. Ed.2d 579 (1986).

Aside from the fact that the underlying documents and the

later SPDs did place employees on firm notice of the coming change,

we find no reason or authority to conclude that pre-1985 silence in

the SPDs is somehow tantamount to an affirmative contractual

commitment and that El Paso's earlier SPDs impliedly cede the right

to later amend or discontinue coverage. While clear and

unambiguous statements in the summary plan description are binding,

the same is not true of silence. There is nothing in the way of

context, inference, or presumption to persuade us otherwise.

Contractual vesting is a narrow doctrine. To prevail, Plaintiffs

must assert strong prohibitory or granting language; mere silence

is not of itself abrogation.

Even assuming, however, that the pre-1985 SPDs contained an

implied promise of continued benefits for future retirees, these

earlier summaries cannot govern the instant case because they are

no longer in effect. The SPDs issued in 1985 cover these

18
plaintiffs before us and therefore control our analysis. El Paso's

earlier SPDs cannot be read in isolation, and in no way can they be

construed to preclude the possibility of future amendment. Upon a

careful review of the summary judgment record, and with particular

emphasis upon the applicable 1985 SPDs which clearly highlight El

Paso's right to amend or terminate post-retirement benefits, we

conclude that no basis can be found in the language of the earlier

SPDs or in the plan documents to counter El Paso's reserved right

to do so. "Absent such a contractual assurance, ERISA permits an

employer to decrease or increase benefits." Vasseur, 950 F.2d at

1006.

Finally, we address Plaintiffs' argument that the 1985 SPDs

are themselves inconsistent and that the rules of construction

announced in our recent case, Hansen v. Continental Insurance

Company, 940 F.2d 971 (5th Cir. 1991), mandate that we adopt the

most pro-beneficiary interpretation. Specifically, Plaintiffs

contend that El Paso's failure to include the possibility of

amendment or termination under the SPD heading, WHEN YOUR COVERAGE

WILL END," (listing it instead under the heading "OTHER IMPORTANT

INFORMATION"), must be construed as a promise to provide free

health benefits. "Under Hansen," the plaintiffs maintain, "the

test is whether or not one provision of an SPD, taken in its most

natural reading, would entitle Plaintiffs to lifetime benefits. If

so, they are entitled to lifetime benefits." (citing Hansen, 940

F.2d at 981, n.7). We agree that Hansen is a case of significant

19
guidance and authority on this issue, and Plaintiffs cite the

general rule accurately. But close analysis reveals that it does

not buttress their position.

In Hansen, the plaintiff disputed payments made to him under

a group accidental health and dismemberment policy following the

death of his wife in an automobile accident. Hansen contended that

under the insurer's SPD, he was due $120,000, 60 percent of the

amount of coverage. Continental relied instead upon the

conflicting terms of the underlying policy and responded by

tendering a check for $80,000, 40 percent of the principal sum.

The company argued that the SPD had to be read in concert with the

plan document, and if doing so revealed ambiguity or conflict, the

plan's terms must control. We disagreed. After finding federal

jurisdiction under ERISA, we determined that the essential purpose

of an SPD -- "to enable the average participant in the plan to

understand readily the general features of the policy" -- would be

undermined if workers were held to the complex, master policy

whenever the statutorily-mandated SPD was either ambiguous or in

outright conflict with the policy. Id. at 981. Refusing to adopt

a rule that would "eviscerate" ERISA's requirement that an SPD be

"sufficiently accurate and comprehensive to reasonably apprise"

plan participants of their rights and duties under the plan, we

concluded:

[T]he ambiguity in the summary plan description must be
resolved in favor of the employee and made binding
against the drafter. Any burden of uncertainty created
by careless or inaccurate drafting of the summary must be

20
 placed on those who do the drafting, and who are most
able to bear that burden, and not on the individual
employee, who is powerless to affect the drafting of the
summary or the policy and ill equipped to bear the
financial hardship that might result from a misleading or
confusing document. Accuracy is not a lot to ask. And
it is especially not a lot to ask in return for the
protection afforded by ERISA's preemption of state law
causes of action--causes of action which threaten
considerably greater liability than that allowed by
ERISA.

Id. at 981-82 (and quoting 29 U.S.C. § 1022(a)(1)).

Plaintiffs urge that the present case parallels our concerns

in Hansen, where we addressed Continental's argument that the

certificate of insurance that was included at the back of the SPD

-- and which asserted a payout percentage of 40 percent -- should

be considered part and parcel of the SPD. Assuming that erroneous

contention to be true, we still saw no help to Continental since

"[a]t least one provision of the summary plan description, taken in

its most natural reading, would entitle Hansen to 60% of the

principal sum." Id. at 981, n.7. Plaintiffs focus upon this

narrowly-used language:

Certainly, parts of the 1985 SPD, taken in their most
natural natural reading . . . constitute a commitment for non-
contributory retiree insurance until death, remarriage of a
surviving spouse, or loss of eligibility status by dependent
children. Hence, under the rationale of footnote 7,
Plaintiffs are entitled to that benefit. The concurring
opinion of Judge Garwood is expressly based upon footnote 7.

The above language, however, was used in a carefully limited

context. A careful reading of Hansen, and particularly footnote 7,

reveals that its principal concern was with positive

inconsistencies, either within the SPD or between the SPD and the

master documents. None exist here. The amendment/termination

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language was clearly included in the body of the SPD itself in the

case before us. Plaintiffs attempt to manufacture ambiguity by

asserting that El Paso's inclusion of amendment/termination

authority within the 1985 SPDs was misplaced -- listed under "OTHER

IMPORTANT INFORMATION" instead of under "WHEN YOUR COVERAGE WILL

END" -- and that this location created irreconcilable ambiguity.

This argument is without merit. As we held in Hansen, "the summary

plan description must be read as a whole. It would be error to

attend only to one paragraph, page, or portion of the summary."

Id. at 981 (citing Sharron v. Amalgamated Ins. Agency Servs., Inc.,

704 F.2d 562, 566-67 (11th Cir. 1983)). Based upon our reading of

the SPDs as an integrated whole so as to give effect to all of the

provisions, Plaintiffs' argument that El Paso has promised lifetime

continuation of employer-paid medical benefits must fail.

Although a beneficiary's view of an SPD is important, the

correct interpretation cannot be "unrealistically narrow."

Sharron, 704 F.2d at 566 (To "focus on only one page of the summary

[would] represent[] an unrealistically narrow view of how a

reasonably prudent employee would read and review this important

document."). The three listed occurrences that would result in

termination of an individual's benefits speak only to the

elimination of coverage on an individual basis and do not address

the continuation of the Plan as a whole. We find no basis in the

language of the documents to contradict El Paso's unequivocal

reservation of the right to modify or eliminate coverage

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prospectively as to employees retiring after March 1, 1986. The

terms of the governing 1985 SPDs are clear and consistent with the

reservation of rights set out in the Plan itself.8

III. CONCLUSION

In sum, El Paso exercised its reserved, unambiguous right

under ERISA to amend its Plan with respect to health benefits, and

it accurately described that change in the governing 1985 SPDs.

Additionally, El Paso did not incur, nor intend to incur, any

extra-ERISA obligations. El Paso was free to make such a business

decision pursuant to its reserved right. There being no violation

of ERISA, nor any affirmative contractual commitment denying El

Paso's right to withdraw health benefit coverage, the judgment of

the district court was correct.

AFFIRMED.

8
We do not consider the issue whether plan participants
should prevail in instances where the employer fails to inform
them in the SPD that their benefits are subject to unilateral
change and/or termination. That issue does not arise in this
case.

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