05-3828-cv

* The Honorable Timothy C. Stanceu, United States Court of
International Trade, sitting by designation.
UNITED STATES COURT OF APPEALS 1
FOR THE SECOND CIRCUIT 2
3
August Term 2005 4
5
(Argued February 15, 2006 Decided March 29, 2007 6
Errata Filed April 4, 2007) 7
8
-------------------------------------------------------x 9
Docket No.: 05-3828-cv 10
11
Mary McCarthy, Clayton Borowski, on behalf of others similarly 12
situated, and individually, Gail Adams, Donald Bakert, RoseMarie 13
Black, Albin Blom, Mike Blount, William Brady, Donna Cochran, 14
Steve Crowther, Michael Coughlin, Delia Coy, Paul Crowe, Cary 15
Elbaum, Lisa Farnsworth, Jack Finley, James Gabrys, Gregory 16
Gopodarek, Laura Gue, James Hadley, Gerald Hillard, Carl 17
Langbein, Thomas Majka, Frederick Markt, Doris Megesi, Steve 18
Miholics, Marleen Miller, Lewis Moore Jr., Philip Moscato, Brian 19
Neary, Karl Nicosia, Barry O’Neill, Roger Ruggieri, Philip 20
Salamone, Robert Short Jr., Ruth Stewart, Charles Szymanski, 21
Billie Thomas, Frank Tricoli, Bill Tuohy, Jerry Vincent, Walter 22
Waitz, Mark Weiss, Donald Wickersham, John Zimmer and Debbie K. 23
Lubonski, Exec. of the Est. of Katherine J. Lubonski, 24
25
Plaintiffs-Appellants, 26
27
–- v.–- 28
29
The Dun & Bradstreet Corporation, The Dun & Bradstreet 30
Corporation Retirement Account, and The Dun & Bradstreet Career 31
Transition Plan, 32
33
Defendants-Appellees, 34
35
Aldo Camerin, Terri Carpenter, Denise Cyphers and Katherine 36
Lubonski, 37
38
Plaintiffs. 39
-------------------------------------------------------x 40
41
B e f o r e : KEARSE and SACK, Circuit Judges, and STANCEU, 42
Judge.* 43
44
Appeal of grant of motion to dismiss count of complaint, 45
grant of summary judgment, and denial in part of motion to amend 46

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2
complaint, by the United States District Court for the District 1
of Connecticut (Stefan R. Underhill, J.), in favor of Defendants- 2
Appellees. 3
AFFIRMED. 4
5
Thomas G. Moukawsher, Esq. 6
Moukawsher & Walsh, LLC, Hartford, 7
Connecticut, for Plaintiffs- 8
Appellants. 9
10
Patrick W. Shea, Esq., Paul, 11
Hastings, Janofsky & Walker LLP, 12
Christine Button, of counsel, 13
Stamford, Connecticut, for 14
Defendants-Appellees. 15
16
17
Stanceu, Judge: 18
Plaintiffs-appellants are former employees of the Dun & 19
Bradstreet Corporation (“Dun & Bradstreet”) who were terminated 20
from the company when Dun & Bradstreet sold its “Receivables 21
Management Services” operations, conducted in the United States, 22
Canada, and Hong Kong, on April 30, 2001. Upon the sale, 23
plaintiffs-appellants became employees of a new corporation, “Dun 24
& Bradstreet Receivables Management Services,” which resulted 25
from the sale. Their change in employment did not qualify them 26
to receive severance benefits under the “Career Transition Plan,” 27
a Dun & Bradstreet benefit plan. It also affected the retirement 28
benefits that they could receive under another benefit plan, the 29
“Master Retirement Plan,” which on December 31, 2001 was replaced 30

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3
by the “Dun & Bradstreet Corporation Retirement Account Plan.” 1
The new pension plan established as the Dun & Bradstreet 2
Corporation Retirement Account Plan created different retirement 3
benefits but assumed the vested obligations of the superseded 4
Master Retirement Plan, which is at issue in this appeal. 5
Plaintiffs-appellants, many of whom had nearly attained the 6
age of 55 at the time of the sale of the Receivables Management 7
Services operations, sued Dun & Bradstreet, the Dun & Bradstreet 8
Corporation Retirement Account Plan, and the Dun & Bradstreet 9
Career Transition Plan in the United States District Court for 10
the District of Connecticut, seeking individual and class action 11
relief. They alleged that they were wrongfully denied benefits 12
under the Dun & Bradstreet Corporation Retirement Account Plan 13
and the Dun & Bradstreet Career Transition Plan, contrary to the 14
requirements of the Employee Retirement Income Security Act of 15
1974 (“ERISA”), 29 U.S.C. § 1001 et seq. The district court 16
ruled against plaintiffs with respect to both benefit plans. 17
McCarthy v. Dun & Bradstreet Corp., 372 F. Supp. 2d 694 18
(D. Conn. 2005) (McCarthy II); McCarthy v. Dun & Bradstreet 19
Corp., No. 03CV431, 2004 WL 2743569, 2004 U.S. Dist. LEXIS 23996 20
(D. Conn. Nov. 30, 2004) (McCarthy I). 21
Plaintiffs-appellants appeal the district court’s rulings on 22
three motions in favor of defendants-appellees: (1) the district 23
court’s grant of defendants’ motion to dismiss, under 24

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4
Fed. R. Civ. P. 12(b)(6), plaintiffs-appellants’ claim that the 1
“Summary Plan Description” for the Master Retirement Plan 2
violated ERISA by inadequately disclosing the method by which a 3
benefit of the Master Retirement Plan (the “deferred vested 4
retirement benefit”) is reduced actuarially when paid to former 5
employees of Dun & Bradstreet, such as plaintiffs-appellants, who 6
elected to receive payments before reaching age 65; (2) the 7
district court’s grant of defendants-appellees’ summary judgment 8
motion to deny relief on plaintiffs-appellants’ claim that the 9
Master Retirement Plan used an unreasonably high discount rate of 10
6.75 percent to reduce actuarially the deferred vested retirement 11
benefit that the Master Retirement Plan paid to such former 12
employees; and (3) the district court’s denial in part of 13
plaintiffs-appellants’ motion to amend their complaint to 14
challenge as unlawful under ERISA the mortality table that the 15
Master Retirement Plan used in the actuarial reduction. For the 16
reasons discussed in this opinion, we affirm all three rulings of 17
the district court. 18
I. BACKGROUND 19
The facts underlying this appeal, as summarized below, are 20
undisputed. Plaintiffs-appellants ceased being employees of Dun 21
& Bradstreet on April 30, 2001, the date on which the company 22
sold its Receivables Management Services operations. As former 23
employees of Dun & Bradstreet who were terminated before reaching 24

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5
the minimum early retirement age of 55, plaintiffs-appellants no 1
longer qualified for the early retirement benefit that was 2
available under the Master Retirement Plan to employees retiring 3
directly from Dun & Bradstreet. As former employees whose 4
pension benefits had vested by the accrual of a minimum of five 5
years of credited service with Dun & Bradstreet, but who were 6
separated from Dun & Bradstreet before reaching the age of 55, 7
plaintiffs-appellants remained eligible to receive a deferred 8
vested retirement benefit under the Master Retirement Plan. 9
Under the terms of this deferred vested retirement benefit, 10
pension-vested former employees such as plaintiffs-appellants 11
could receive, upon reaching the normal retirement age of 65, the 12
full retirement benefit for which they qualified under the plan. 13
The Master Retirement Plan calculated the full retirement 14
benefit according to a formula based on a participant’s years of 15
credited service and earnings with Dun & Bradstreet, with a 16
reduction designed to compensate for Dun & Bradstreet’s 17
contribution to the participant’s Social Security retirement 18
benefit (the “Social Security Offset”). The Social Security 19
Offset is based on a percentage of the estimated annual 20
retirement benefit the participant would be entitled to receive 21
at age 65 under the Social Security program. 22
The Master Retirement Plan provided that former employees, 23
i.e., employees who terminated their employment before reaching 24

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6
the age of 55, instead of receiving their deferred vested 1
retirement benefit upon their reaching the age of 65, could 2
choose to receive payments as early as age 55. Under this early 3
payment option, a former employee’s deferred vested retirement 4
benefit was actuarially reduced from the amount that would have 5
been paid at age 65 in two respects. First, to reflect the time 6
value of money, the Master Retirement Plan reduced the benefit by 7
a 6.75 percent discount rate for each year prior to the age of 65 8
that payments began. Second, the benefit was reduced by a 9
mortality factor to adjust actuarially for the possibility that a 10
participant might not live to the age of 65. 11
Unlike former employees such as plaintiffs-appellants who 12
were eligible only for deferred vested retirement benefits, 13
employees retiring directly from Dun & Bradstreet were eligible 14
to receive an early retirement benefit under the Master 15
Retirement Plan. The Master Retirement Plan provided this early 16
retirement benefit to employees who accrued ten years of credited 17
service with Dun & Bradstreet, retired directly from Dun & 18
Bradstreet after reaching the age of 55, and chose to receive 19
payments before reaching the age of 65. This early retirement 20
benefit was a more desirable benefit than the deferred vested 21
retirement benefit as actuarially reduced under the early payment 22
option. Under the early retirement benefit, the accrued pension 23

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7
was reduced by only three percent for each year that payments 1
began before the retiree reached the age of 65. 2
To apprise plan participants of the benefits available under 3
the Master Retirement Plan, Dun & Bradstreet, as required by 4
ERISA, provided plan participants with a summary plan description 5
(“Summary Plan Description”). The Summary Plan Description 6
contains both a “Vesting” section that explains the deferred 7
vested retirement benefits available to pension-vested former 8
employees and an “Early Retirement Benefit” section that 9
discusses the early retirement benefits available to 10
directly-retiring Dun & Bradstreet employees. Included in the 11
Early Retirement Benefit section is a reduction table that 12
illustrates the percentage of accrued retirement benefits a 13
direct retiree would receive for each year that payments begin 14
before age 65, based on the three percent annual reduction. 15
There is no table or discussion in the Vesting section of the 16
Summary Plan Description that sets forth the percentage by which 17
the actuarial reduction will reduce the benefit of a pension- 18
vested former employee who is terminated from employment with Dun 19
& Bradstreet before reaching the age of 55 but elects to receive 20
payments before the age of 65. 21
On March 12, 2003, plaintiffs sued in district court, 22
claiming that the provision of the Master Retirement Plan that 23
actuarially reduced benefits of former employees who elected to 24

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8
receive payments prior to attaining the age of 65 could not be 1
enforced against them because, in their view, the Summary Plan 2
Description was inadequate under ERISA. They maintained that, as 3
a result of the deficiencies in the Summary Plan Description, 4
they should be held to qualify for unreduced benefits or, 5
alternatively, for the early retirement benefits they would have 6
received had they retired directly from Dun & Bradstreet. The 7
district court dismissed this count of plaintiffs’ complaint 8
under Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon 9
which relief can be granted. The district court concluded that 10
the treatment of the actuarial reduction in the Summary Plan 11
Description was satisfactory under ERISA. Plaintiffs-appellants 12
raise the same issue on appeal. 13
Plaintiffs-appellants argue, as a second issue on appeal, 14
that the district court erred in denying them the opportunity to 15
amend their complaint to raise a challenge to the mortality table 16
used in the Master Retirement Plan which, together with the 6.75 17
percent discount rate reduction, actuarially reduced the deferred 18
vested retirement benefit payable to former employees choosing to 19
receive payments before reaching age 65. The district court 20
denied the motion, concluding that the amendment would constitute 21
an entirely new claim that would have prejudiced defendants 22
because the amendment was sought at a late stage of the 23

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9
litigation, after the close of discovery and after defendants had 1
moved for summary judgment. 2
Plaintiffs-appellants also claimed in district court, and 3
argue again on appeal, that the 6.75 percent discount rate that 4
the Master Retirement Plan used to reduce actuarially the 5
deferred vested retirement benefits of former employees renders 6
the actuarial reduction unreasonable. This discount rate, in 7
their view, “works a prohibited forfeiture of benefits under 8
ERISA Section 203(a).” Am. Compl. ¶ 95. The district court 9
awarded summary judgment to defendants-appellees, concluding that 10
ERISA does not require a “zero-risk” discount rate and that no 11
reasonable juror could find that the 6.75 percent discount rate 12
was unreasonable. McCarthy II, 372 F. Supp. 2d at 699 & n.2. 13
II. DISCUSSION 14
A. The District Court Did Not Err in Dismissing the Claim that 15
the Summary Plan Description Violates ERISA 16
Section 102 and related provisions of ERISA require that a 17
summary plan description be furnished to all participants and 18
beneficiaries of an employee benefit plan and that it reasonably 19
apprise participants and beneficiaries of their rights and 20
obligations under the plan. 29 U.S.C. §§ 1022(a), 21
1024(b) (2000). Before the district court, plaintiffs-appellants 22
claimed in their amended complaint that Dun & Bradstreet violated 23
ERISA Section 102 by “fail[ing] to include in the [Master 24
Retirement Plan] summary plan description the actuarial 25

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10
assumptions and/or the reduction chart it intended to apply to 1
early retirement for former employees . . . .” Am. Compl. ¶ 93. 2
They sought as relief “unreduced benefits upon early retirement 3
or, in the alternative, early retirement benefits reduced for 4
former employees in the same manner as such benefits are reduced 5
for current Dun & Bradstreet employees.” Am. Compl. WHEREFORE 6
Cl. ¶ 3. The district court, concluding that the Summary Plan 7
Description satisfied the requirements of ERISA, granted 8
defendants’ motion to dismiss. McCarthy I, 2004 WL 2743569, 9
at *5, 2004 U.S. Dist. LEXIS 23996, at *15. 10
We review de novo determinations of a district court that 11
resolve a motion to dismiss a complaint. Miller v. Wolpoff & 12
Abramson, L.L.P., 321 F.3d 292, 300 (2d Cir. 2003). In reviewing 13
a motion to dismiss under Fed. R. Civ. P. 12(b)(6) for failure to 14
state a claim upon which relief can be granted, we accept as true 15
all factual statements alleged in the complaint and draw all 16
reasonable inferences in favor of the non-moving party. In re 17
Tamoxifen Citrate Antitrust Litig., 429 F.3d 370, 384 18
(2d Cir. 2005), amended by 466 F.3d 187, 200 (2d Cir. 2006). In 19
general, our review is limited to the facts as asserted within 20
the four corners of the complaint, the documents attached to the 21
complaint as exhibits, and any documents incorporated in the 22
complaint by reference. Taylor v. Vt. Dep’t of Educ., 313 F.3d 23
768, 776 (2d Cir. 2002). 24

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11
The Federal Rules of Civil Procedure require that a pleading 1
contain “a short and plain statement of the claim showing that 2
the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). 3
Under this simplified standard for pleading, “a court may dismiss 4
a complaint only if it is clear that no relief could be granted 5
under any set of facts that could be proved consistent with the 6
allegations.” Tamoxifen, 429 F.3d at 384 (quoting Swierkiewicz 7
v. Sorema N.A., 534 U.S. 506, 514 (2002) (quotation marks, 8
citation, and alteration omitted)). We therefore must construe 9
the complaint liberally to determine whether the district court 10
erred in concluding that plaintiffs could prove no set of facts 11
that would entitle them to relief on their claim that the Summary 12
Plan Description violates Section 102 of ERISA. See generally 13
Jaghory v. N.Y. State Dep’t of Educ., 131 F.3d 326, 329 (2d Cir. 14
1997). We find no error in the district court’s grant of the 15
motion to dismiss and agree with the underlying conclusion that 16
the Summary Plan Description did not violate Section 102 of 17
ERISA. 18
Section 102(a) of ERISA provides that a summary plan 19
description “shall be sufficiently accurate and comprehensive to 20
reasonably apprise such participants and beneficiaries of their 21
rights and obligations under the plan.” 29 U.S.C. § 1022(a). 22
ERISA Section 102(b) lists specific information that must be 23
included in every summary plan description, including the 24

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12
“circumstances which may result in disqualification, 1
ineligibility, or denial or loss of benefits . . . .” 2
Id. § 1022(b). 3
The disclosure requirements ERISA imposes on summary plan 4
descriptions present two issues concerning the Summary Plan 5
Description for the Master Retirement Plan. The first, and more 6
general, issue is whether the Summary Plan Description, in 7
describing the deferred vested retirement benefit, is 8
sufficiently accurate and comprehensive to satisfy Section 9
102(a). Because plaintiffs do not claim that the Summary Plan 10
Description is inaccurate, the question is whether the Summary 11
Plan Description is insufficiently comprehensive to “reasonably 12
apprise” plaintiffs of their rights because it does not disclose 13
the method by which the deferred vested retirement benefit 14
available to former employees choosing to receive payments before 15
age 65 would be actuarially reduced. The second, and more 16
specific, issue is whether the Summary Plan Description, in not 17
disclosing that method of actuarial reduction, complies with the 18
Section 102(b) requirement to disclose “circumstances which may 19
result in disqualification, ineligibility, or denial or loss of 20
benefits.” 21
ERISA provides some guidance on the meaning of the 22
requirement in Section 102(a) to “reasonably apprise” 23
participants and beneficiaries by including a long list of 24
specifically-required disclosures in Section 102(b). That 25

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13
statutory list does not include, specifically or by implication, 1
the method of actuarial reduction at issue in this case. The 2
Department of Labor has promulgated regulations that interpret 3
and expand the statutory list of required disclosures and, in so 4
doing, provide further guidance to drafters of summary plan 5
descriptions on what disclosures are required to meet the general 6
statutory requirement to reasonably apprise beneficiaries of plan 7
benefits. See 29 C.F.R. §§ 2520.102-2 - 102-4. The regulations, 8
like the statute, do not explicitly require disclosure of the 9
method of actuarial reduction at issue here. This omission, 10
while somewhat indicative, does not entirely resolve the issue 11
before us. It can be argued that the method of actuarial 12
reduction, even though not expressly required to be disclosed by 13
the statute or the regulations, is important enough to a 14
description of the deferred vested retirement benefit that any 15
such omission results in a summary plan description that is 16
insufficient under Section 102(a). 17
The Summary Plan Description for the Master Retirement Plan 18
addressed in separate sections the normal retirement benefit, the 19
early retirement benefit, and the deferred vested retirement 20
benefit. From our review of the Summary Plan Description and of 21
these three sections in particular, we conclude that the Summary 22
Plan Description reasonably apprised plan participants and 23
beneficiaries of their rights under the deferred vested 24
retirement benefit and thereby satisfied Section 102(a) of ERISA. 25

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1 The Summary Plan Description, under the heading How the
Retirement Plan Works, discusses the normal retirement benefit as
follows:
Your normal retirement date under the Plan is your
65th birthday and retirement benefits generally begin
with your first full month of retirement. The Plan
pays a monthly retirement benefit based on credited
service and earnings at separation from service with
the Company.
If you wish, you can retire as early as age 55
. . . provided you meet certain service requirements.
Your Retirement Plan benefit is reduced if you begin
receiving payments before age 65 or before age 60 if
you have at least 35 years of service.
Summ. Plan Description at 8-9.
14
It did so by apprising participants and beneficiaries of the 1
deferred vested retirement benefit in general and by specifically 2
distinguishing that benefit from the early retirement benefit. 3
In a section under the heading “How the Retirement Plan 4
Works,” the Summary Plan Description explains that the normal 5
retirement date under the Plan is a participant’s 65th birthday, 6
that payment of benefits normally begins the first full month 7
thereafter, and that the retirement benefit is calculated based 8
on credited service and earnings at separation from service with 9
Dun & Bradstreet.1 The same section contains a reference to the 10
possibility of retirement as early as age 55, if certain 11
requirements are met. This early retirement option is discussed 12
in more detail in the “Early Retirement Benefit” section of the 13
Summary Plan Description, which explains that an employee with at 14
least 10 years of vesting service may choose to retire as early 15

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2 The relevant text of the Early Retirement Benefit section
of the Summary Plan Description states as follows:
You can retire before age 65 -- as early as age 55
-- if you have completed at least 10 years of vesting
service. Your accrued benefit at early retirement is
calculated based on the same formula used for normal
retirement, but the amount payable to you is subject to
reduction as described below if payments begin before
you reach age 65. You also may retire early and delay
receiving payment until age 65. In this case, your
full accrued benefit is paid.
If payments start early, your Retirement Plan
accrued benefit is reduced 3% for each year that
payments begin before age 65. That’s because you’ll
receive benefits over a longer period of time. If you
are between any 2 of the ages shown in the following
table, the reduction is pro-rated.
Summ. Plan Description at 11.
15
as age 55. The section also explains that an early-retiring 1
employee may choose to delay receiving payment until age 65, in 2
which case the full accrued benefit would be paid. It further 3
explains that an employee retiring early may choose to receive 4
payments as early as age 55 but that, as a result, the accrued 5
benefit will be reduced by three percent for each year that 6
payments begin before age 65. The same section contains the 7
aforementioned reduction table setting forth the percentage of 8
accrued retirement benefits a direct retiree would receive for 9
each year that payments begin before age 65, based on the 10
reduction of three percent for each year that payments begin 11
before the participant reaches the age of 65.2
12
In discussing the ordinary and early retirement benefits 13
available to employees, the sections of the Summary Plan 14

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16
Description entitled How the Retirement Plan Works and Early 1
Retirement Benefit do not expressly or impliedly refer to the 2
situation of an employee who is separated from employment before 3
reaching the minimum early retirement age of 55 and who chooses 4
to receive payments before reaching age 65. Deferred vested 5
retirement benefits are discussed in the separate section 6
entitled Vesting, which appears later in the Summary Plan 7
Description. The Vesting section, to which plaintiffs-appellants 8
direct their principal argument that the Summary Plan Description 9
is inadequate under Section 102 of ERISA, begins by defining the 10
concept of vesting, explaining that “[v]esting means earning the 11
right to receive a retirement benefit, at a future date –– even 12
if you leave the Company before you are eligible for retirement.” 13
Summ. Plan Description at 17. It adds that “[y]ou are fully 14
vested in your accrued Retirement Plan benefits after you 15
complete 5 years of vesting service.” Id. The next paragraph 16
describes the deferred vested retirement benefit in general, 17
i.e., as it applies absent the early payment option, stating that 18
“[i]f you terminate employment after becoming vested, you will be 19
entitled to receive a deferred vested retirement benefit from the 20
Plan” and that “[y]our deferred vested benefit is calculated in 21
the same way as a normal retirement benefit assuming benefit 22
payments begin at age 65.” Id. Finally, in a third paragraph 23
consisting of a single sentence, the Summary Plan Description 24
discusses the consequence of electing early payment of the 25

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17
deferred vested retirement benefit. The sentence reads as 1
follows: “If you choose, the payment of your deferred vested 2
benefit can begin as early as age 55, but the amount of the 3
benefit will be reduced actuarially, resulting in a lower Plan 4
benefit than if the reduction table in the ‘Early Retirement 5
Benefit’ section was used.” Id. 6
The Summary Plan Description might have been more 7
informative in discussing the early payment option of the 8
deferred vested retirement benefit. However, neither ERISA nor 9
the Labor Department’s regulations require a summary plan 10
description to describe or illustrate every method by which a 11
plan benefit may be limited under an early payment option or 12
similar such limitation. The Labor Department’s regulations 13
expressly allow a Summary Plan Description to summarize, rather 14
than describe in every detail, the benefits available under an 15
employee pension benefit plan. “Such plan benefits shall be 16
described or summarized.” 29 C.F.R. § 2520.102-3(j)(1). For 17
these reasons, we are unable to agree with plaintiffs-appellants’ 18
argument that the Summary Plan Description is inadequate under 19
Section 102(a) of ERISA, 29 U.S.C. § 1022(a). 20
We turn next to the second issue presented, i.e., whether 21
the Summary Plan Description complied with Section 102(b) of 22
ERISA, 29 U.S.C. § 1022(b). As the district court observed, 23
§ 1022(b) “specifically says that the [Summary Plan Description] 24

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18
must set out ‘circumstances which may result in . . . loss of 1
benefits.’” McCarthy I, 2004 WL 2743569, at *4, 2004 U.S. Dist. 2
LEXIS 23996, at *12 (quoting 29 U.S.C. § 1022(b)) (emphasis added 3
by district court). The Summary Plan Description, in the section 4
entitled “Vesting,” discloses the circumstances in which the 5
actuarial reduction would occur, i.e., when a participant whose 6
employment terminates after the participant’s benefits become 7
vested but before the participant becomes eligible for retirement 8
chooses to receive payments before reaching the normal retirement 9
age of 65. As did the district court, we decline to construe 10
Section 102(b) of ERISA to require disclosure of more detail, 11
e.g., the specific method of actuarial reduction, than the 12
circumstances resulting in the reduced benefits. 13
The Labor Department’s regulations expand on the statutory 14
obligation of Section 102(b) to disclose in a summary plan 15
description “circumstances which may result in disqualification, 16
ineligibility, or denial or loss of benefits . . . .” 17
29 U.S.C. § 1022(b). The regulations, in this regard, require 18
that the summary plan description disclose the “circumstances 19
which may result in disqualification, ineligibility, or denial, 20
loss, forfeiture, suspension, offset, reduction, or recovery 21
(e.g., by exercise of subrogation or reimbursement rights) of any 22
benefits that a participant or beneficiary might otherwise 23
reasonably expect the plan to provide on the basis of the 24

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19
description of benefits required by paragraphs (j) and (k) of 1
this section.” 29 C.F.R. § 2520.102-3(l) (emphasis added). The 2
Summary Plan Description at issue satisfies this requirement of 3
the regulations, both by disclosing the circumstances in which 4
the actuarial reduction will occur, and by distinguishing the 5
early payment option of the deferred vested retirement benefit 6
from the early retirement benefit. As the district court 7
observed, “[t]here is simply no way that a former employee 8
reading [the Vesting] section could be under the impression that 9
he was to receive the same benefits as current employees.” 10
McCarthy I, 2004 WL 2743569, at *4, U.S. Dist. LEXIS 23996, 11
at *13. 12
The Labor Department’s regulations, in addressing the 13
contents of a summary plan description, provide that 14
[t]he format of the summary plan description must not 15
have the effect to [sic] misleading, misinforming or 16
failing to inform participants and beneficiaries. Any 17
description of exception [sic], limitations, 18
reductions, and other restrictions of plan benefits 19
shall not be minimized, rendered obscure or otherwise 20
made to appear unimportant. Such exceptions, 21
limitations, reductions, or restrictions of plan 22
benefits shall be described or summarized in a manner 23
not less prominent than the style, captions, printing 24
type, and prominence used to describe or summarize plan 25
benefits. 26
27
29 C.F.R. § 2520.102-2(b) (emphasis added). Here also, the 28
Summary Plan Description does not run afoul of the regulatory 29
requirements. The regulations permit a summary plan description 30

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20
to summarize a limitation on a benefit, so long as the other 1
requirements of the regulations are observed. 2
Plaintiffs-appellants argue that the Summary Plan 3
Description is inadequate because, in failing to disclose the 4
method of actuarial reduction in the Vesting Section, it does 5
not disclose “what their age 55 retirement benefits are.” 6
Br. of Pls.-Appellants 12. They argue further that the Summary 7
Plan Description “misleads the plaintiffs by highlighting what 8
Dun & Bradstreet says are the subsidized benefits of current 9
employees and obscuring the stunning difference between 10
subsidized (70 percent of normal retirement) and unsubsidized 11
(38 percent of normal retirement) early retirement benefits,” 12
id., and “minimizes” the effect of benefit limitations and 13
restrictions, id. at 5. They argue that the Summary Plan 14
Description causes confusion by omitting discussion of the 15
“fate” of terminated early retirees in the Early Retirement 16
Benefit section in the Summary Plan Description and by 17
discussing this type of former employee “only briefly” in a 18
“vaguely titled” section called Vesting. Id. In their view, 19
the Summary Plan Description should have included a reduction 20
table, statement, or illustration to explain the extent of the 21
actuarial reduction. Id. at 20. 22
We find no reason to conclude that the Vesting section of 23
the Summary Plan Description confuses, misleads, or misinforms 24

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21
plan participants whose employment is terminated prior to their 1
reaching the minimum early retirement age of 55 such that they 2
would believe that they will receive the early retirement 3
benefit. To the contrary, the Vesting section expressly informs 4
the reader that a plan participant who leaves Dun & Bradstreet 5
before becoming eligible for retirement and who receives the 6
deferred vested retirement benefit prior to the age of 65 will 7
not receive the early retirement benefit determined according to 8
the reduction table in the Early Retirement Benefit section but 9
instead, as a result of actuarial reduction, will receive a 10
lower benefit. Moreover, because the Vesting section is 11
sufficiently prominent within the context of the Summary Plan 12
Description as a whole, we do not conclude that the text or 13
format of the Summary Plan Description minimized, rendered 14
obscure, or otherwise made to appear unimportant the limitation 15
resulting under the early payment option of the deferred vested 16
retirement benefit that was available to employees leaving Dun & 17
Bradstreet before reaching the age of 55 and choosing to receive 18
payments prior to age 65. 19
Plaintiffs-appellants maintain that the failure of the 20
Summary Plan Description to disclose the size of the actuarial 21
reduction violates ERISA as construed in Layaou v. Xerox Corp., 22
238 F.3d 205 (2d Cir. 2001). We disagree that our holding in 23
Layaou compels the conclusion that the Summary Plan Description 24

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22
at issue in this appeal violates ERISA. Layaou does not hold 1
that to satisfy ERISA requirements a summary plan description 2
invariably must describe or illustrate the method by which a 3
specific retirement benefit is actuarially reduced in a 4
particular circumstance, such as this case, where the employees 5
separated before reaching the minimum early retirement age and 6
elected to receive a vested benefit before reaching the ordinary 7
retirement age. 8
The plaintiff Layaou, upon voluntarily leaving the employ 9
of Xerox in 1983, had received under a retirement plan lump-sum 10
distributions totaling $22,353.88. Layaou, 238 F.3d at 11
206 & n.2. Layaou was re-employed by Xerox in 1987, began 12
earning retirement benefits for this second employment period, 13
and was laid off in 1994 during a reduction-in-force. 14
Id. at 206. Each year, Layaou had received from Xerox a 15
brochure to fulfill the ERISA obligation for a summary plan 16
description as well as a form listing the estimated individual 17
retirement benefits Layaou had earned to date. Id. at 206-07. 18
The summary plan description brochure stated,“[t]he amount you 19
receive may also be reduced if you had previously left the 20
Company and received a distribution at that time.” Id. at 210. 21
The form issued to Layaou in 1994 estimated for Layaou a monthly 22
retirement benefit of $924 as calculated under the Retirement 23
Income Guarantee Plan guaranteed annuity calculation method 24

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23
(“RIGP method”), which was one of three methods used by the 1
Xerox retirement plan to calculate retirement benefits; the 2
Xerox retirement plan paid benefits upon retirement in an amount 3
equal to the highest result of three different calculation 4
methods. Id. at 206, 210. The $924 estimated monthly benefit 5
was based on retirement at age 65. See id. at 206-07. As did 6
the brochure, the form stated that the benefits as calculated 7
under the RIGP method “may be reduced if you receive amounts 8
before age 65 or receive amounts from another Xerox retirement 9
plan.” Id. at 207. The 1994 form notified Layaou that under 10
the Cash Balance Retirement Account method (“CBRA method”) of 11
calculating his benefits, he would receive a lump sum payment of 12
$18,403 and that under the Transitional Retirement Account 13
method (“TRA method”), his lump sum benefit would be $9,244. 14
Id. 15
When Layaou’s retirement became effective in 1995, by which 16
time Layaou had reached the age of 55, the plan administrator 17
calculated Layaou’s benefit as a lump sum and converted it to a 18
monthly payment of $145; this amount was calculated not under 19
the RIGP method but under the CBRA method, which under the plan 20
administrator’s calculation yielded the highest of the three 21
benefit calculation methods. Layaou, 238 F.3d at 207-08. The 22
final calculation of Layaou’s monthly retirement benefit 23
reflected a reduction for what Xerox referred to as a “phantom 24

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24
account” offset, under which earned benefits were reduced by the 1
value of a hypothetical account containing the original 2
distributed sum (in this case, $22,353.88) and an amount based 3
on an estimate of what that distribution would have earned had 4
it been invested. Id. at 206-07. 5
The brochure constituting the summary plan description did 6
not inform Layaou about the “phantom account” offset other than 7
by stating that “[t]he amount you receive may also be reduced if 8
you had previously left the Company and received a distribution 9
at that time.” Id. at 210. The form containing the annual 10
estimate, in referring to the benefit calculated under the RIGP 11
method, alluded generally to the possibility of a reduction “if 12
you . . . receive amounts from another Xerox retirement plan.” 13
Id. The form did not include such a qualification in presenting 14
the estimated lump-sum distributions calculated under the CBRA 15
and TRA methods. 16
We concluded in Layaou that the summary plan description 17
contravened ERISA by “fail[ing] to provide notice to Layaou and 18
other similarly situated employees that their future benefits 19
would be offset by an appreciated value of their prior lump-sum 20
benefits distributions.” Id. We found that the summary plan 21
description failed to satisfy Section 102 of ERISA and the Labor 22
Department’s regulations, noting that the summary plan 23
description did not clearly identify the loss of benefits caused 24

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25
by a prior lump-sum distribution. Id. at 211 (citing 29 C.F.R. 1
§ 2520.102-3(l)). 2
In contrast to the summary plan description at issue in 3
Layaou, the Vesting section of the Summary Plan Description for 4
the Master Retirement Plan is definite in informing a 5
participant that a reduction will occur under the early payment 6
option and gives some information, albeit limited, about the 7
method of reduction, stating that “the amount of the benefit 8
will be reduced actuarially, resulting in a lower Plan benefit 9
than if the reduction table in the ‘Early Retirement Benefit’ 10
section was used.” Summ. Plan Description at 17. The 11
information provided about the method of reduction, although 12
presented only in brief summary form, is sufficient under 13
Section 102 of ERISA and the Labor Department’s regulations, 14
which permit some details about a particular option associated 15
with a particular benefit to be summarized. The Summary Plan 16
Description reasonably apprises participants of their rights 17
concerning the deferred vested retirement benefit provided by 18
the Master Retirement Plan and discloses the circumstances under 19
which that benefit will be reduced. 20
Plaintiffs-appellants point to dicta in Layaou in which we 21
noted that a statement such as “‘[a]ny future benefit will be 22
offset by the appreciated value of any prior distribution 23
assuming that amount remained in the plan’” would have sufficed 24

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26
to provide employees with sufficient notice of the plan’s offset 1
provision, and in which we indicated that a clarifying example 2
calculating the benefits of an employee who had received a prior 3
distribution could have provided adequate notice. Layaou, 4
238 F.3d at 211. We do not consider the dicta in the Layaou 5
opinion to signify that ERISA imposes a blanket requirement 6
under which a Summary Plan Description invariably must describe 7
the method of calculating an actuarial reduction or must use a 8
clarifying example to illustrate how a benefit is actuarially 9
reduced when a participant who has vested rights to receive a 10
particular plan benefit chooses to receive payments before 11
reaching normal retirement age. 12
Plaintiffs-appellants’ reliance on various other precedents 13
is also misplaced. Plaintiffs-appellants argue that in Feifer 14
v. Prudential Insurance Co. of America, 306 F.3d 1202 15
(2d Cir. 2002), this court refused to allow a plan sponsor to 16
reduce disability plan benefits by the amount of participants’ 17
social security benefits where the reduction was not properly 18
disclosed in a summary plan description. Id. at 1212. Feifer, 19
however, does not support this argument. In Feifer, the 20
employer had distributed a “Program Summary” with an 21
accompanying booklet announcing a new benefits plan that did not 22
exist in written form at the time the Program Summary was 23
distributed. Id. at 1205. We concluded that the Program 24
Summary and the booklet, at the time they were distributed, 25

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27
constituted the actual retirement plan for ERISA purposes and 1
that no summary plan description of the retirement plan existed 2
at that time. Id. at 1209-10. As a result, the Program Summary 3
controlled the amount of permissible reductions to an employee’s 4
benefits. Id. Feifer did not involve the question of the 5
adequacy of a disclosure of a benefit reduction in a summary 6
plan description associated with a retirement plan and therefore 7
has no bearing on the issue before us. 8
Plaintiffs-appellants also rely on Burke v. Kodak 9
Retirement Income Plan, 336 F.3d 103 (2d Cir. 2003). They argue 10
that pursuant to the holding in Burke, an employer may not 11
enforce a plan requirement where that requirement was not 12
clearly set forth in the section of the summary plan description 13
that dealt with the benefits at issue. However, Burke is 14
distinguishable because it involved a conflict between the 15
employer’s summary plan description and the retirement plan. 16
See id. at 110-11. In Burke, a plaintiff sued for survivor 17
income benefits under a retirement plan that conditioned 18
eligibility for receipt of such benefits on the filing of an 19
affidavit. Id. at 106. The “Survivor Income Benefits” section 20
of the summary plan description omitted any reference to the 21
affidavit requirement, to which the summary plan description 22
made reference in sixteen other sections. Id. Accordingly, we 23
held that the summary plan description violated ERISA, applying 24
the well-established principle that “[w]here the terms of a plan 25

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28
and the [summary plan description] conflict, the [summary plan 1
description] controls.” Id. at 110. Plaintiffs-appellants are 2
not alleging a conflict between Dun & Bradstreet’s Summary Plan 3
Description and the Master Retirement Plan. 4
Plaintiffs-appellants argue that the common-law principle 5
of Gediman v. Anheuser Busch, Inc., 299 F.2d 537 (2d Cir. 1962), 6
a pre-ERISA case, requires us to reject a summary plan 7
description that conceals the size of a benefit reduction. We 8
do not find this argument persuasive. Gediman involved benefits 9
owed on behalf of a deceased beneficiary of a pension plan who 10
previously had received negligent advice from an employer’s 11
pension consultants. Id. at 541. H. James Gediman, the 12
executor of an estate, brought the action on behalf of the 13
deceased former employee, James Barsi, to recover amounts 14
allegedly due under the employer’s pension plan. Id. at 538-39. 15
Barsi, who had arranged for an early retirement date and had 16
elected to receive deferred cash benefits instead of an annual 17
pension benefit, died as a result of a car accident prior to 18
receiving the payments under the deferred cash benefit option. 19
Id. at 540-41. Just before he elected to receive the deferred 20
cash benefits, Barsi wrote a letter to his employer, seeking 21
advice regarding his retirement benefit options. Id. He 22
received written advice in the form of a memorandum from the 23
employer’s pension consultants that failed to inform him that, 24
as a result of an election to receive the cash benefits, the 25

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29
value of his benefits would be greatly reduced in the event of 1
his death before the deferral date for the cash payments. 2
Id. at 545. The employer was held liable in tort for the 3
negligent advice of the pension consultants. Id. at 547-48. 4
Gediman is distinguishable from this case in two ways. 5
First, because the case did not arise out of ERISA, it does not 6
involve the statutory and regulatory requirements imposed on a 7
summary plan description. Instead, the case involved the 8
application of common-law principles regarding the fiduciary 9
duty of care that arose when the pension consultants voluntarily 10
undertook to give advice to Barsi. Second, the facts of Gediman 11
are inapposite. In Gediman, the court held that the defendant 12
misinformed Barsi as to the consequences of the election that he 13
made upon retirement. Id. at 539. The opinion explains that 14
the memorandum from the pension consultants failed to disclose 15
that the retirement plan would provide a greatly reduced benefit 16
if Barsi should die before rather than after his deferral date 17
and also failed to disclose that the retirement plan, in that 18
event, provided a benefit under a “wholly different regime.” 19
Id. at 545 (“[T]he ‘death benefit’ described in paragraph 3 of 20
their memorandum differed from that in paragraph 2 not just in 21
degree but in kind.”). The court even went so far as to 22
conclude that the defendants had misled Barsi. Id. at 547. 23
In contrast to the situation in Gediman, the Summary Plan 24
Description at issue here did not misinform or mislead the 25

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30
plaintiffs-appellants. It disclosed the circumstances that 1
would result in a reduction of their benefits and, as set forth 2
above, was not required by statute or regulation to disclose the 3
specifics of how the reduction would occur. 4
Plaintiffs-appellants also direct our attention to Wilkins 5
v. Mason Tenders District Council Pension Fund, 445 F.3d 572 6
(2d Cir. 2006), which was decided after briefing and oral 7
argument in this appeal. Plaintiffs-appellants argue that the 8
holding in Wilkins supports their claim that the Summary Plan 9
Description violates ERISA because it fails to disclose relevant 10
information regarding the size of benefits due to former 11
employees electing to receive early payment of deferred vested 12
retirement benefits. We disagree. Wilkins involved the failure 13
of a summary plan description to disclose “‘circumstances which 14
may result in disqualification, ineligibility, or denial or loss 15
of benefits.’” Id. at 580-81 (quoting 29 U.S.C. § 1022(b)). 16
The plaintiff in Wilkins was a union employee who, over a 17
period of thirty years, worked in the construction industry for 18
several different employers. Id. at 575. The employers were 19
required by collective bargaining agreements with the union to 20
contribute to the union pension fund based on their employees’ 21
covered employment. Id. In Wilkins’s case, there were 22
significant discrepancies between the earnings that the 23
employers reported to the pension fund and those the employers 24
reported to the Social Security Administration. Id. at 575-76. 25

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31
Following his receipt of a lump sum benefit in 1999, Wilkins 1
claimed additional benefits based on work that was not reflected 2
in the records of the fund but was reflected in his Social 3
Security Administration statement of earnings. Id. at 576. The 4
pension fund maintained a policy that employees seeking benefits 5
based on work that was not reported by employers must submit 6
“proof of covered employment as a condition of receiving the 7
benefits to which they are entitled under the terms of the plan 8
. . . .” Id. at 584. Social Security earning statements did 9
not suffice under the policy. Id. at 576-77. Additionally, 10
this policy was not set forth in the summary plan description. 11
Id. at 581. Because Wilkins did not produce proof of covered 12
employment, his claim was denied. Id. at 576-77. 13
The district court denied relief on other grounds. 14
Id. at 577-78. On appeal, Wilkins argued that his benefits were 15
wrongfully denied due to the failure of the summary plan 16
description to comply with 29 U.S.C. § 1022(b), and we agreed. 17
Id. at 584. “It seems to us obvious that the Policy, by 18
erecting an additional, mandatory prerequisite to the receipt of 19
promised benefits, may result in disqualification, 20
ineligibility, or a denial or loss of benefits. It must, 21
therefore, be disclosed in the [summary plan description].” Id. 22
Because “no provision of the [summary plan description] even 23
arguably gives notice of the Policy,” the summary plan 24
description violated ERISA. Id. at 582. 25

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32
Unlike the summary plan description at issue in Wilkins, 1
the Summary Plan Description for the Master Retirement Plan 2
adequately discloses the circumstances under which the actuarial 3
reduction will occur. As we stated previously, the relevant 4
circumstances are those of a participant whose employment 5
terminates after the participant becomes vested but before the 6
participant becomes eligible for retirement, and who chooses to 7
receive payments before reaching the normal retirement age 8
of 65. 9
B. The District Court Did Not Abuse its Discretion in Denying 10
in Part Plaintiffs-Appellants’ Motion to Amend the Complaint to 11
Challenge the Mortality Table 12
13
Before the district court, plaintiffs moved under Fed. R. 14
Civ. P. 15(a) to amend their previously amended complaint to 15
add, inter alia, a claim that the mortality table used by the 16
Master Retirement Plan to calculate the actuarial reduction for 17
deferred vested retirement benefits is outdated and unreasonable 18
when combined with the 6.75 percent discount rate. Br. of 19
Pls.-Appellants 29, 32. The district court denied the motion in 20
part, declining to allow plaintiffs to add the claim concerning 21
the mortality table, which the district court considered to be 22
an entirely new claim that was being raised at a late stage in 23
the litigation, i.e., after discovery had been completed and 24
after defendants had moved for summary judgment. McCarthy II, 25
372 F. Supp. 2d at 700-01. 26
We review the determination of a district court to deny a 27

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33
party leave to amend the complaint under Fed. R. Civ. P. 15(a) 1
for abuse of discretion. Grochowski v. Phoenix Constr., 2
318 F.3d 80, 86 (2d Cir. 2003). We find that the district court 3
did not abuse its discretion in denying the motion in part and 4
thereby disallowing the claim pertaining to the mortality table. 5
Although Rule 15(a) of the Federal Rules of Civil Procedure 6
provides that leave to amend “shall be freely given when justice 7
so requires,” it is within the sound discretion of the district 8
court to grant or deny leave to amend. See Zahra v. Town of 9
Southold, 48 F.3d 674, 686 (2d Cir. 1995) (upholding the denial 10
of a motion to amend a complaint that was filed two and one-half 11
years after the commencement of the action and three months 12
prior to trial); see also Ansam Assocs., Inc. v. Cola Petroleum, 13
Ltd., 760 F.2d 442, 446 (2d Cir. 1985) (upholding the denial of 14
a motion to amend a complaint when discovery already had been 15
completed and the non-movant had already filed a motion for 16
summary judgment). A district court has discretion to deny 17
leave for good reason, including futility, bad faith, undue 18
delay, or undue prejudice to the opposing party. See Foman v. 19
Davis, 371 U.S. 178, 182 (1962). However, “[o]utright refusal 20
to grant the leave without any justifying reason for the denial 21
is an abuse of discretion.” Jin v. Metro. Life Ins. Co., 22
310 F.3d 84, 101 (2d Cir. 2002). 23
Plaintiffs filed the original complaint in this action on 24
March 12, 2003 and amended it on July 9, 2003. McCarthy II, 25

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34
372 F. Supp. 2d at 699. They moved to amend the complaint a 1
second time on December 21, 2004, more than two months after 2
discovery was completed and more than a year and a half after 3
the filing of the original complaint. Id. at 700. The district 4
court originally granted the motion, believing it unopposed. 5
Id. Defendants moved to vacate the order granting the motion to 6
amend. Id. Defendants did not object to most of plaintiffs’ 7
proposed amendments but opposed the amendment that would add a 8
claim concerning the reasonableness of the mortality table used 9
in the Master Retirement Plan’s actuarial reduction. Id. 10
In denying plaintiffs’ second motion to amend, the district 11
court noted that plaintiffs’ complaint “specifically alleged an 12
unreasonable interest rate” but “did not allege, in general, an 13
improper actuarial reduction, which might encompass a number of 14
factors, including the mortality table used.” Id. at 701. The 15
district court noted that the first amended complaint “did not 16
claim that the ‘application of an unreasonable actuarial 17
reduction’ worked a forfeiture, and it certainly did not claim 18
that the ‘application of an unreasonable mortality table’ worked 19
a forfeiture.” Id.; see Am. Compl. ¶ 95. The district court 20
concluded that “plaintiffs’ motion to amend seeks to add a new 21
claim.” McCarthy II, 372 F. Supp. 2d at 700. The district 22
court further concluded that “[i]f the amendment is allowed, 23
merits discovery will need to be reopened and the litigation 24

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35
will, in essence, start over – the same experts will likely need 1
to produce new reports and be re-deposed.” Id. at 701. 2
Plaintiffs became aware of the need to consider a possible 3
claim directed to the mortality table more than seven months 4
before moving to amend their complaint. Their own expert had 5
provided, by April 30, 2004, a declaration disclosing his 6
position that the mortality table used by the Master Retirement 7
Plan raised an issue. See Claude Poulin Decl. dated 8
Apr. 30, 2004, ¶ 20. His declaration stated that “the mortality 9
table used by the Plan in the calculation of the actuarial 10
reduction factors is an old table that overestimates the 11
mortality rates currently applicable to the affected plan 12
participants.” Id. ¶ 18. On May 27, 2004, the same expert, 13
during a deposition, again identified a potential issue with the 14
mortality table, testifying that the mortality tables used by 15
the plan were outdated and led to a skewed actuarial reduction. 16
Claude Poulin Dep. dated May 27, 2004, at 122. 17
Plaintiffs-appellants argue that defendants were not 18
prejudiced by an amendment because the April 2004 declaration and 19
May 2004 deposition of plaintiffs’ actuarial expert gave 20
defendants full and fair notice that the mortality table 21
“significantly contributed to the ERISA violation alleged in the 22
original complaint.” Br. of Pls.-Appellants 29-30. As the 23
district court correctly noted, however, the amended complaint 24
challenged specifically the discount rate used in the actuarial 25

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36
reduction, not the actuarial reduction method itself. 1
McCarthy II, 372 F. Supp. 2d at 701. A complaint provides a 2
defendant with “notice of what the plaintiff’s claim is and the 3
grounds upon which it rests.” See Swierkiewicz, 534 U.S. 4
at 512-14 (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)) 5
(quotation marks omitted). Having received such notice, a 6
defendant may conduct his trial preparation accordingly and is 7
not required, based on the plaintiff’s subsequent conduct in 8
litigation, to anticipate future claims that a plaintiff might 9
intend to pursue. Thus, when plaintiffs’ counsel attempted to 10
question defendants’ expert about mortality assumptions during an 11
October 6, 2004 deposition, defendants’ counsel objected, stating 12
that “[a]t some point I have [to move for] a protective order if 13
you turn it into a deposition not about the opinion the witness 14
has been retained to testify on, but on a separate issue that is 15
not mentioned in the complaint, not mentioned at the motion to 16
dismiss stage that led to this round of briefing, and is not in 17
the case.” Edward W. Brown Dep. dated Oct. 6, 2004, at 74. 18
Plaintiffs sought to amend their complaint after an 19
inordinate delay. By that time, discovery had closed, defendants 20
had filed for summary judgment, and nearly two years had passed 21
since the filing of the original complaint. In light of this 22
record, we conclude that the district court did not exceed its 23
discretion in denying plaintiffs’ leave to amend. 24

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37
C. The District Court Did Not Err in Granting Summary Judgment 1
on the Lawfulness of the 6.75 Percent Discount Rate 2
3
We review de novo a district court’s grant of summary 4
judgment. Miller, 321 F.3d at 300. Summary judgment is awarded 5
when there are no genuine issues of material fact and the moving 6
party is entitled to judgment as a matter of law. Fed. R. 7
Civ. P. 56(c). In ruling on a summary judgment motion, the 8
district court must “‘resolve all ambiguities, and credit all 9
factual inferences that could rationally be drawn, in favor of 10
the party opposing summary judgment’” and determine whether there 11
is a genuine dispute as to a material fact, raising an issue for 12
trial. Kessler v. Westchester County Dep’t of Soc. Servs., 13
461 F.3d 199, 206 (2d Cir. 2006) (quoting Cifra v. Gen. Elec. 14
Co., 252 F.3d 205, 216 (2d Cir. 2001)). A fact is “material” 15
when it “‘might affect the outcome of the suit under governing 16
law.’” Jeffreys v. City of N.Y., 426 F.3d 549, 553 (2d Cir. 2005) 17
(quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 18
(1986)). An issue of fact is “genuine” if “‘the evidence is such 19
that a reasonable jury could return a verdict for the nonmoving 20
party.’” Id. (quoting Anderson, 477 U.S. at 248). Unless the 21
nonmoving party offers “‘some hard evidence showing that its 22
version of the events is not wholly fanciful[,]’” summary 23
judgment is granted to the moving party. Id. at 554 (quoting 24
D’Amico v. City of N.Y., 132 F.3d 145, 149 (2d Cir. 1998)). 25

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38
Before the district court and again on appeal, plaintiffs- 1
appellants argued that one component of the Master Retirement 2
Plan’s actuarial reduction, the 6.75 discount rate, violated 3
ERISA because the discount rate was unreasonable and “[t]he 4
application of an unreasonable rate of interest works a 5
prohibited forfeiture of benefits under ERISA Section 203(a).” 6
Am. Compl. ¶ 95 According to plaintiffs-appellants, a 7
reasonable discount rate is “a long-term rate” based on 8
“relatively risk-free investments,” namely the thirty-year 9
Treasury Bond, that would “‘yield the kind of investment return 10
retiring plan participants would experience in the marketplace.’” 11
Br. of Pls.-Appellants 8-9 (quoting Claude Poulin Dep. dated 12
May 27, 2004, at ¶ 14). 13
The district court granted summary judgment to defendants, 14
concluding as a matter of law that ERISA does not mandate the use 15
of a zero-risk discount rate. McCarthy II, 372 F. Supp. 2d 16
at 699. The district court saw no genuine issue of material fact, 17
considering the rate chosen by the Plan to be “one that no 18
reasonable juror could find unreasonable . . . .” Id. 19
We agree with the district court that ERISA does not require 20
a plan to use in the actuarial reduction a zero-risk discount rate 21
or a rate that is practically risk-free. We see no error in the 22
district court’s finding that the actuarial reduction used in the 23
Master Retirement Plan was not unreasonable solely for using a 24

-- 38 of 49 --

3 ERISA Section 206 was amended by the Pension Protection
Act of 2006, Pub. L. No. 109-280, 120 Stat. 780 (2006), which
resulted in the addition of a new subsection. The text of
Section 206(a), which was not modified by the amendment, is as
follows:
In the case of a plan which provides for the payment
of an early retirement benefit, such plan shall provide
that a participant who satisfied the service requirements
for such early retirement benefit, but separated from the
service (with any nonforfeitable right to an accrued
benefit) before satisfying the age requirement for such
early retirement benefit, is entitled upon satisfaction
of such age requirement to receive a benefit not less
than the benefit to which he would be entitled at the
normal retirement age, actuarially reduced under
regulations prescribed by the Secretary of the Treasury.
29 U.S.C. § 1056(a).
39
6.75 percent discount rate. We therefore affirm the grant of 1
summary judgment to defendants-appellees. 2
Section 206(a) of ERISA requires employers offering an early 3
retirement benefit to current employees to offer an equivalent, 4
although actuarially reduced, early retirement benefit to 5
qualifying employees who have separated from service prior to 6
satisfying the age requirement for early retirement. 29 U.S.C. 7
§ 1056(a).3 The benefit the separated employee receives upon 8
satisfying the age requirement for early retirement must be “not 9
less than the benefit to which he would be entitled at the normal 10
retirement age, actuarially reduced under regulations prescribed 11
by the Secretary of the Treasury.” Id. 12
Section 206(a), among other sections of ERISA, has a 13
counterpart in the Internal Revenue Code, which contains 14

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40
provisions allowing favorable tax treatment to qualifying 1
retirement plans. Section 401(a)(14) of Title 26 contains the 2
parallel provision to ERISA Section 206(a) in providing that a 3
qualified defined benefit pension plan must afford early 4
retirement benefits that are “not less than the benefit to which 5
[the participant] would be entitled at the normal retirement age, 6
actuarially, reduced under regulations prescribed by the Secretary 7
[of the Treasury].” 26 U.S.C. § 401(a)(14) (2000). 8
The Secretary of the Treasury has promulgated regulations to 9
construe Internal Revenue Code § 401(a)(14). These regulations 10
provide that under a qualifying plan the “reduced normal [i.e., 11
early] retirement benefit is the benefit to which the participant 12
would have been entitled under the plan at normal retirement age, 13
reduced in accordance with reasonable actuarial assumptions.” 14
26 C.F.R. § 1.401(a)-14(c)(2) (emphasis added). 15
We conclude, as did the district court, that the regulations 16
do not specify a rate or range of discount rates that qualify as 17
“reasonable actuarial reductions” for payment of early retirement 18
benefits. McCarthy II, 372 F. Supp. 2d at 696. The parties are 19
also in agreement on this point. See Edward W. Brown Report dated 20
Aug. 4, 2004, at 4 (stating that “[n]either the IRS [n]or any 21
actuarial organization has published guidance on what constitutes 22
a reasonable interest rate for determining early retirement 23
payments”); Claude Poulin Decl. dated Apr. 30, 2004, ¶ 20 (stating 24
that “there are no prescribed interest rate or mortality table 25

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41
assumptions for the calculation of early retirement reduction 1
factors . . . .”). We further conclude that by failing to specify 2
a discount rate, the regulations provide benefit plans with a 3
degree of discretion in setting discount rates to achieve a 4
reduction according to reasonable actuarial assumptions. 5
The question of whether the discount rate qualifies as a 6
reasonable rate for purposes of ERISA is a mixed question of law 7
and fact. “Because statutory terms are at issue, their 8
interpretation is a question of law, and it is the court’s duty to 9
define the appropriate legal standard.” Chandris, Inc. v. Latsis, 10
515 U.S. 347, 369 (1995). However, a question of fact exists if 11
reasonable persons applying the proper legal standard could differ 12
on whether the reduction was accomplished according to actuarial 13
assumptions that were reasonable as a result of the discount rate 14
used. See id. Mixed questions of law and fact are reviewed under 15
the de novo standard. Beth Israel Med. Ctr. v. Horizon Blue Cross 16
and Blue Shield of New Jersey, Inc., 448 F.3d 573, 580 17
(2d Cir. 2006). 18
In determining whether the Master Retirement Plan was 19
reasonable in its use of the 6.75 percent discount rate for the 20
actuarial reduction, the district court found that “a plan has met 21
its ERISA obligations with respect to calculation of early benefit 22
payments if it selects a discount rate that is reasonably 23
calculated to be representative of its participants’ average 24
discount rate,” McCarthy II, 372 F. Supp. 2d at 698, i.e., the 25

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42
average of the rates of return desired by the participants, which 1
would vary according to such factors as degree of risk and 2
duration of investment, see id. at 697. The court then considered 3
the assumptions a plan can make with regard to the average 4
discount rate of its participants. The court noted that in 5
selecting a discount rate, a plan could assume that its 6
participants have a zero tolerance for risk or could instead focus 7
on a plan’s rate of return. The court determined that the 8
investment characteristics of a plan and a plan’s rate of return 9
are instructive because the rate of return controls the amount of 10
defined benefit a plan will offer. Id. The district court 11
considered the discount rate used in the Master Retirement Plan 12
not to be unreasonable because that rate, although above the zero- 13
risk rate on thirty-year government securities that plaintiffs 14
proposed, was well below the approximate 8-10 percent rate of 15
return on the Master Retirement Plan’s assets. Id. at 698-99. 16
Plaintiffs-appellants submit that the rate is unreasonable, 17
arguing that employer contributions, not plan returns, control the 18
amount of defined benefits that a plan is able to offer in the 19
first place. Br. of Pls.-Appellants 24. They consider it 20
unreasonable to use a plan’s investment experience when 21
calculating deferred vested retirement benefits because investment 22
in the equities market is volatile, future projections of a plan’s 23
investment returns are self-interested, and allowing a plan 24
sponsor to rely on investment returns assumes that past returns 25

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43
are relevant to the analysis of long-term future investment 1
returns. Id. at 25-26. 2
The court finds no error in the district court’s conclusion 3
that the actuarial reduction method was not unreasonable solely 4
for its use of a 6.75 percent discount rate. The rate was 5
significantly lower than the approximately 8-10 percent rate of 6
return earned on the assets of the Master Retirement Plan, the 7
6.75 discount percent rate was below the 7.37 and 6.88 percent 8
average interest rates on thirty-year government securities that 9
existed around the time the plan was created, and plaintiffs- 10
appellants’ own expert did not testify that the 6.75 percent 11
discount rate was presumptively unreasonable as an actuarial 12
matter when used in a calculation for deferred vested retirement 13
benefits. 14
A plan’s experience in the market, i.e., the actual rate of 15
return on the plan’s investments, is relevant to determining 16
whether an actuarial rate is reasonable. In 2002, the Master 17
Retirement Plan’s actuary estimated, for funding purposes, that 18
the plan’s projected rate of return would be 8.25 percent. 19
McCarthy II, 372 F. Supp. 2d at 698. The Master Retirement Plan’s 20
investment experience in the equities market yielded relatively 21
consistent results: “Over the past two years, the Plan assets have 22
earned a rate of return of 9.63%; over the last year, 15.91%; over 23
the past 10 years, 10.78%; and over the past 15 years, 10.27%.” 24
Id. at 696. The 6.75 percent discount rate used by the Master 25

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44
Retirement Plan for purposes of the actuarial reduction was thus 1
below both the estimated rate of return and the actual rate of 2
return achieved by the assets of the plan. 3
A discount rate chosen by a plan may be suspect where a plan 4
projects inordinately high returns or experiences unusually high 5
investment success and bases its actuarial discount rate on this 6
high rate. There is no indication here, however, that the Master 7
Retirement Plan sought to link the discount rate with its 8
projected return on investment. The fact that the discount rate 9
selected by the Master Retirement Plan to calculate actuarial 10
reductions fell well below that rate, which was projected to be 11
8.25 percent but actually yielded an average over 10 percent, is a 12
further indication that the actuarial assumptions are not 13
unreasonable solely because of the use of the 6.75 percent 14
discount rate. Nor is there any indication in the record that the 15
Master Retirement Plan based its portfolio of investments on high- 16
risk equities yielding volatile returns. 17
Additionally, the Master Retirement Plan selected and 18
maintained a discount rate that was, at the time, comparable to 19
the interest rate on thirty-year government securities. The 20
Master Retirement Plan was amended and restated in 1994, in which 21
year the average interest rate for thirty-year government 22
securities was 7.37 percent. See Fed. Reserve Statistical 23
Release: Selected Interest Rates: Historical Data: 30-year 24
Treasury Bill, available at 25

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4 Defendants-appellees argue that the 1995 determination
letter that Dun & Bradstreet received from the IRS demonstrates
implicit approval by the IRS that the discount rate and other
actuarial assumptions in the Master Retirement Plan were
reasonable. The determination letter refers to only two sections
of the Treasury regulations, sections 1.401(a)(4)-1(b)(2) and
1.401(a)(4)-4(b), both of which require that benefits be provided
in a nondiscriminatory manner, and does not refer to the
regulation addressing reasonable actuarial assumptions, section
1.401(a)-14(c)(2). See 26 C.F.R. §§ 1.401(a)(4)-1(b)(2),
(a)(4)-4(b), (a)-14(c)(2). In addition, I.R.S. Publication 794,
which discusses the significance and limitations of a favorable
determination letter, states that “[a] determination letter does
not consider whether actuarial assumptions are reasonable for
funding or deduction purposes or whether a specific contribution
is deductible.” I.R.S. Publ. 794, Favorable Determination Letter
at 2 (Rev. Sept. 2006). The court therefore declines to accord
great weight to the determination letter. See Esden v. Bank of
Boston, 229 F.3d 154, 175-76 (2d Cir. 2000).
45
http://www.federalreserve.gov/releases/h15/data.htm. In 1995, at 1
the time the Internal Revenue Service (“IRS”) reviewed the plan 2
for compliance with the trust qualification requirements of 3
26 U.S.C. § 401(a), the average interest rate for thirty-year 4
government securities was 6.88 percent, a rate comparable to but 5
still higher than the Plan’s 6.75 percent rate.4 Id.; Br. of 6
Pls.-Appellants 10 (stating that the 6.75 percent fixed rate ten 7
years ago approximated the rate of the thirty-year Treasury Bond). 8
By selecting a discount rate that was lower than the average 9
interest rate set for thirty-year government securities, the 10
Master Retirement Plan applied a discount rate that was at that 11
time more favorable to participants in the plan than would have 12
been the thirty-year interest rate on government securities. In 13
summary, the district court’s finding that no juror could have 14
found on this record that the use of the 6.75 percent discount 15

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5 At the time the District Court issued its Memorandum and
Order on June 6, 2005, the rate on thirty-year Treasury bills was
approximately 4.9 percent. See McCarthy II, 372 F. Supp. 2d
at 698.
46
rate was unreasonable is further supported by the average rate of 1
return on the Master Retirement Plan’s investments, which was 2
substantially higher than the discount rate, and the rate of 3
return on thirty-year government securities around the time the 4
plan was created, which was comparable to the discount rate. 5
Plaintiffs-appellants argue that although application of the 6
6.75 percent discount rate may have been reasonable in 1995, it is 7
not reasonable in today’s low interest rate environment.5
8
Essentially, plaintiffs-appellants advocate for “periodic” 9
adjustment of the rate used to determine actuarial equivalence. 10
Reply Br. of Pls.-Appellants 18 (arguing that “nothing prevents 11
the company from periodically reviewing its rate and changing it 12
as needed”). ERISA does not specifically require that retirement 13
plans periodically adjust their actuarial interest rates. If a 14
plan were required to do this, an employer potentially could 15
manipulate the benefits provided to a participant, particularly in 16
a year in which interest rates were extraordinarily high. The 17
court recognizes the concern expressed in the relevant provisions 18
of Title 26, Title 29, and the related regulations, that employers 19
should not be able to manipulate actuarial assumptions to their 20
benefit and to the detriment of employees. See, e.g., 21
26 U.S.C. § 401(a)(25) (requiring, in order for a defined benefit 22

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6 Both parties relied on experts that are Fellows in the
Society of Actuaries, members of the American Academy of
Actuaries, and Enrolled Actuaries under ERISA. See Claude Poulin
Decl. dated April 30, 2004, ¶ 1, Ex. A; Edward W. Brown Report
dated Aug. 4, 2004, at 1.
47
plan to be treated as providing definitely determinable benefits, 1
that “whenever the amount of any benefit is to be determined on 2
the basis of actuarial assumptions, such assumptions [be] 3
specified in the plan in a way which precludes employer 4
discretion”). 5
Plaintiffs’ expert, Claude Poulin, prepared a declaration and 6
testified at deposition on the unreasonableness of the actuarial 7
discount rate.6 Notably, he did not testify that the 6.75 percent 8
discount rate was presumptively unreasonable or that it failed to 9
comply with industry standards. Instead, he testified that he had 10
seen discount rates both lower and higher than that used by the 11
Master Retirement Plan. Claude Poulin Dep. dated May 27, 2004, 12
at 49. He concluded that “the interest rate in conjunction with 13
the mortality tables [was] unreasonable in determining actuarial 14
equivalency.” Id. at 122 (emphasis added). The essence of 15
Mr. Poulin’s testimony was that the discount rate adopted by the 16
Master Retirement Plan became unreasonable when it was used in 17
connection with what he considered to be an outdated mortality 18
table. Id. at 48, 52. Mr. Poulin testified that “it is possible 19
to generate or create a mortality table that combined with a 6.75 20
percent interest rate would produce a reasonable actuarial 21

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7 This section of the Internal Revenue Code has been amended
to provide, in relevant part, that the applicable interest rate
means “the adjusted first, second, and third segment rates
applied under rules similar to the rules of section 430(h)(2)(C)
for the month before the date of the distribution or such other
time as the Secretary may by regulations prescribe.” 26 U.S.C.
§ 417(e)(3)(C), amended by Pension Protection Act of 2006,
Pub. L. No. 109-280, 120 Stat. 780 (2006). The amendments made
by this section apply with respect to plan years beginning after
December 31, 2007. Id.
48
equivalent benefit.” Id. at 132. The fact that plaintiffs’ own 1
expert did not characterize the 6.75 percent discount rate as 2
presumptively unreasonable but testified that “many plan rates are 3
lower or maybe slightly higher” supported the district court’s 4
conclusion. Id. at 49 (emphasis added). 5
Plaintiffs’ expert further stated that “the rates used for 6
the calculation of lump sums give an indication of what ERISA and 7
the Internal Revenue Code prescribe as reasonable actuarial 8
assumptions for the purpose of determining actuarial equivalence 9
in general.” Claude Poulin Decl. dated Apr. 30, 2004, ¶ 20. The 10
statute, 26 U.S.C. § 417(e)(3)(A)(ii)(II), formerly required that 11
qualified retirement plans use the annual interest rate yield on 12
thirty-year Treasury securities in determining certain 13
distributions.7 We note significant differences between lump sum 14
distributions and deferred vested retirement benefits. Although 15
use of the thirty-year Treasury rate may create a strong 16
presumption that a plan complies with 26 C.F.R. 17
§ 1.401(a)-14(c)(2), neither the Internal Revenue Code nor any 18
regulations require use of the rate on thirty-year Treasury 19

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49
securities to determine the actuarial equivalent of a deferred 1
vested retirement benefit. 2
III. CONCLUSION 3
For the reasons stated in the foregoing, the district court’s 4
grant of defendants’ motion to dismiss the count of the complaint 5
that challenged the Summary Plan Description, the district court’s 6
denial in part of plaintiffs’ motion to amend the complaint to 7
disallow a claim relating to the mortality table, and the district 8
court’s award of summary judgment in favor of defendants on the 9
issue of the use by the Master Retirement Plan of the 6.75 percent 10
discount rate in the actuarial reduction, are AFFIRMED. 11

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