Vallone v. Cna Financial Corporation

This case involves another episode in the widespread efforts of corporations to reduce their liabilities by cutting back on retiree benefits. The law in this circuit is well-established, but this does nothing to cushion the hardship of pensioners faced with a new drain on their limited resources.

In late 1991, The Continental Insurance Company (Continental) offered an early retirement package to some of its employees as a cost containment initiative. Michael J. Vallone, Joyce E. Heidemann and James J. O'Keefe (collectively, the plaintiffs) are three of the 347 Continental employees who accepted the early retirement package (the early retirees), which included the "lifetime" welfare benefit at issue in this case, a Health Care Allowance (HCA). In 1995, Continental was acquired by CNA Financial Corporation (CNA). In 1998, CNA notified the early retirees that as of January 1, 1999, their HCA benefit would be terminated. The plaintiffs challenged this decision by complaining to the Plan Administrator of CNA's retirement plan, to no avail. They subsequently brought suit, alleging claims of wrongful denial of benefits under the Employee Retirement Income Security Act (ERISA), breach of contract, estoppel and a breach of fiduciary duty. The district court granted summary judgment to the defendants on all claims, and we now affirm.

In November 1991, Continental offered a Voluntary Special Retirement Program (VSRP) to its employees who had 85 years of combined age and service (with minima of 55 years of age and 10 years of service). The VSRP included a monthly Health Care Allowance (HCA), a welfare benefit that was offered to all retirees. However, the HCA benefit offered as part of the VSRP differed from the HCA benefit available to regular retirees. It is the nature of this difference that is at issue here. Accompanying the VSRP were explanatory materials, some of which the plaintiffs claim expressed Continental's intent to vest the HCA benefit, and others which CNA claims did just the opposite. The potential early retirees were also told, both orally and in writing, that the HCA benefit would be a "lifetime benefit." The plaintiffs are three of the 347 Continental employees who accepted early retirement under the VSRP in early 1992. Continental was acquired by CNA in 1995.

All went smoothly until August 1998, when CNA notified the early retirees that their HCA benefit would be eliminated as of January 1, 1999. The plaintiffs complained by telephone to CNA officials and were told that the Plan Administrator's decision was appropriate and final. Believing they had no practical recourse under the administrative appeal procedures made available to them by the general retirement plan, the plaintiffs sued CNA in a purported class action on behalf of Continental employees who elected to retire under the VSRP, bringing claims of violation of § 502(a)(1)(B) of ERISA, 29 U.S.C. § 1132(a)(1)(B) for wrongfully failing to pay benefits (Count II), breach of fiduciary duty in violation of § 404 of ERISA, 29 U.S.C. § 1104 (Count III), breach of ERISA and common law bilateral contracts (Count IV) and promissory estoppel (Count V).1

Two other putative class members, Bernard A. Serek and Thomas L. Jones, had submitted written appeals to CNA's Plan Administrator, in which they argued that the VSRP documents created a contract or entitlement that prohibited unilateral termination of their HCA benefits. Serek and Jones received substantially the same response as did the plaintiffs. Because Serek and Jones had exhausted their administrative claims, the district court found that the plaintiffs were excused on grounds of futility from the requirement that they exhaust their own administrative claims. (Appellants' Short Appx., Memorandum Op. and Order 11/10/99 (11/10/99 Order) at 7-8.) However, because the plaintiffs had not themselves complied with the administrative review procedures, the district court was unwilling to allow them to "start from scratch in federal court." (Appellants' Short Appx., Memorandum Op. and Order 5/16/00 (5/16/00 Order) at 4.) Thus, purportedly on the basis that the evidence relevant to evaluating a Plan Administrator's discretionary decision to deny benefits is limited to those materials available to the Plan Administrator, the district court (at least initially) stayed discovery on all of the plaintiffs' claims and limited its review to the administrative record of Serek's and Jones's complaints. Id. at 4-5. Broader discovery was later allowed with respect to the fiduciary duty claim, though summary judgment was granted to CNA on the other three claims. (Appellants' Short Appx., Memorandum Op. and Order 12/28/00 (12/28/00 Order) at 3 n.3, 13.) The district court eventually granted summary judgment to CNA on the fiduciary duty claim as well. (Appellants' Short Appx., Memorandum Op. and Order 3/28/03 (3/28/03 Order) at 7.)

The plaintiffs now appeal the district court's decision to limit discovery to the administrative record on three of its claims and from its grant of summary judgment on all counts. CNA appeals the district court's decision to widen the scope of discovery with respect to the plaintiffs' breach of fiduciary duty claim, though this would matter only if we were to reverse the district court's grant of summary judgment on that claim.

The retirement package in this case involves a complicated construction of enhancements to the general retirement plan in effect at the time. Not surprisingly, the parties disagree about which documents (and oral representations) created the VSRP and its enhanced HCA benefit at issue here. Continental's general retirement plan documents — which (together with their reservations of rights clauses) CNA argues are part of the VSRP — include the 1990 Comprehensive Health Care and Dental Plan of the Continental Corporation (1990 Plan) (R. 109-1, ex. 1), Your Benefits in 1991 (1991 General Summary Plan Description (SPD)) (R. 109-1, ex. 4), A Guide for Benefits for Employees Considering Retirement During 1991 (1991 Retirement Guide) (R. 109-1, ex. 6), A Guide for Employees Considering Retirement During 1992 (1992 Retirement Guide) (R. 109-1, ex. 7) and Retiree Benefits in 1991 (1991 Retiree SPD) (R. 109-1, ex. 8). Additionally, between the time the plaintiffs (and other early retirees) complained about the termination of their HCA benefit and the time the Plan Administrator rendered his decision on the formal appeals of other early retirees, CNA amended the 1990 Plan and created the 1996 Continental Insurance Company Retiree Group Medical and Dental Plan (1996 Plan) (R. 109-1, ex. 3), which became effective in October 1998. Continental also supplied the early retirees with several documents at the time it solicited their participation in the VSRP. These documents (the VSRP Documents) include a covering memorandum dated November 21, 1991 (VSRP Covering Memo) (R. 109-2, ex. 9), A Brief Description of the Voluntary Special Retirement Program (Brief Description Newsletter) (R. 109-2, ex. 12), the 1992 Retirement Guide, a personalized calculation worksheet (R. 109-2, ex. 10), a payment election form (R. 109-2, ex. 11), an acceptance/rejection form (R. 109-2, ex. 13) and a retiree benefit elections form (R. 109-2, ex. 14).

Continental is also alleged to have made oral representations to the potential early retirees regarding the nature of the HCA benefit. During group and individual meetings that took place in late 1991 between Continental's human resources representatives and eligible employees in various locations around the country, the HCA was consistently described as a "lifetime" benefit.2 Heidemann, who was an assistant vice president of human resources for the Great Lakes region and an officer of the company at the time of her retirement, testified at deposition that she had been told by her superiors in human resources that the HCA benefit was a "lifetime" benefit. (R. 118-2, tab 1, Heidemann dep. at 145, 164.) She could not recall anyone ever telling her that the VSRP benefits were irrevocable. Id. at 147. She strongly believed the VSRP was separate and distinct from the general retirement plan, and since no one in human resources ever told her the benefits could be revoked, id., and none of the documents specifically discussing the VSRP contained a disclaimer, id. at 163, 218-19, she assumed that the "lifetime" benefits were irrevocable. When Heidemann presented the VSRP to the eligible employees in her region (including Vallone), she represented the benefits as being for "your lifetime" but did not say anything about their irrevocability. (R. 118-2, tab 2, Vallone dep. at 77-79, 82.)

The district court, from the perspective of the evidence most favorable to the plaintiffs, determined that eligible employees were told that the benefits were for their own and their spouses' lifetimes; that they were not told the benefits could be changed or revoked (although they were referred to documents that reserved those rights); that they were not told the "lifetime" benefits were irrevocable, but they nevertheless concluded that the benefits were irrevocable for reasons similar to Heidemann's reasons; that this conclusion was material to their decision to retire; that Continental had no intention at the time of the plaintiffs' retirement of altering the HCA benefit; and that the intention and decision to change benefits came several years later, after Continental had been acquired by CNA. (3/28/03 Order at 6.) We find that these factual determinations are reasonable and are supported by the record, but we would add that although Continental may not have had any intention of terminating the early retirees' benefits, it did know that under ERISA its plan documents allowed it to do so.

The district court initially stayed discovery with respect to all of the plaintiffs' claims, limiting its review to only those materials considered by the Plan Administrator at the time he denied Serek's and Jones's written claims for benefits. (5/16/00 Order at 4.) The record could, however, be augmented (upon motion of the plaintiffs) by any written materials germane to the interpretation of the VSRP and the Plan that were not contained in the administrative record. Id. at 4-5. The plaintiffs never made such a motion. Later, the district court allowed the plaintiffs to pursue expanded discovery on their fiduciary duty claim. (12/28/00 Order at 3 n.3.) Of course, neither party is content with the district court's handling of discovery, which just proves the truth of the old saw: if you try to please everybody, you end up pleasing nobody.

We review a district court's decisions on discovery matters for abuse of discretion. Searls v. Glasser, 64 F.3d 1061, 1068 (7th Cir.1995). A court does not abuse its discretion "unless one or more of the following circumstances is present: (1) the record contains no evidence upon which the court could have rationally based its decision; (2) the decision is based on an erroneous conclusion of law; (3) the decision is based on clearly erroneous factual findings; or (4) the decision clearly appears arbitrary." Sherrod v. Lingle, 223 F.3d 605, 610 (7th Cir.2000), quoting Gile v. United Airlines, 95 F.3d 492, 495 (7th Cir.1996). Moreover, "[w]e will not reverse the court's decision absent a clear showing that the denial of discovery resulted in actual and substantial prejudice to the complaining litigant." Searls, 64 F.3d at 1068.

The standard of review of a Plan Administrator's decisions regarding benefits depends on whether the Plan Administrator was given the discretion to make those decisions. See Perlman v. Swiss Bank Corp. Comprehensive Disability Prot. Plan, 195 F.3d 975, 980 (7th Cir. 1999) ("Decisions of ERISA plan administrators presumptively receive de novo review, but if the plan establishes discretionary authority then review will be deferential.") (citations omitted). As we explain in more detail below, CNA's Plan Administrator had sufficient discretion that our review of his decision to deny benefits on the basis that there was no contract vesting benefits must be deferential. And "[d]eferential review of an administrative decision means review on the administrative record." Id. at 981-82. Thus, with respect to the early retirees' claims for wrongful denial of benefits and breach of ERISA and common law contract, the district court correctly limited discovery to the complete administrative record since the Plan Administrator's decision to deny benefits was based on a determination that the HCA benefits could be terminated or altered because they were not vested (i.e., because no contract existed that vested the plaintiffs' HCA benefits).

However, the plaintiffs' estoppel claim, which the district court limited to the same record for the same reason, is not actually an appeal of a decision of the Plan Administrator. An estoppel claim requires (among other things) a knowing misrepresentation — generally in writing — here alleged to be Continental's representation to the potential early retirees that the HCA benefits would be vested when Continental knew they could be terminated or modified. In reviewing Serek's and Jones's appeals, the Plan Administrator did not make any finding whether the equities of the situation required CNA to honor any non-legally-binding representations it may have made that the benefits were vested. Thus, since the estoppel claim is not a review of a decision of the Plan Administrator, the district court erred in limiting discovery to the administrative record with respect to the estoppel claim.

Notwithstanding the district court's error, its decision to limit the record with respect to the plaintiffs' estoppel claim is harmless, because the plaintiffs never asserted or demonstrated prejudice. Even after being allowed additional discovery on their fiduciary duty claim, the plaintiffs have pointed to nothing — oral or written — that the district court's limitation prevented it from considering. Rather, the plaintiffs argue, citing Bidlack v. Wheelabrator Corp., 993 F.2d 603 (7th Cir.1993) (en banc), that unspecified "extrinsic evidence" should have been allowed to "explain what was intended under the VSRP and what was promised to the [early retirees] as an inducement to retire." (Appellants' Br. at 25.) The district court, which ultimately found that oral representations were irrelevant to the plaintiffs' estoppel claim because the documents were not ambiguous, specifically allowed the plaintiffs to move to augment the administrative record with any "written materials germane to the interpretation of the VSRP and the Plan" which they learned of that were not already included. (5/16/00 Order at 4-5.) The plaintiffs never made such a motion. Since the plaintiffs do not tell us what "extrinsic evidence" the district court failed to consider due to limitations on the record, and since the district court seems to have considered all relevant evidence in the entire record (all written documents purporting to relate to the VSRP and/or the general retirement plan, as well as Continental's oral and written representations that the HCA benefits were "lifetime"), the plaintiffs fail to demonstrate any prejudice, even after being invited to do so by CNA in its brief.

From another direction, CNA challenges the district court's decision to expand the record with respect to the fiduciary duty claim (12/28/00 Order at 3 n.3), even though the district court eventually granted summary judgment in its favor in the face of the augmented record. CNA argues that the district court erred in permitting the plaintiffs to take discovery beyond the record with respect to their fiduciary duty claim, and that the Plan Administrator's discretion requires that review be limited to the administrative record as it was for the other claims. However, the breach of fiduciary duty is alleged to have occurred when oral misrepresentations were made to the potential early retirees at the time they were considering whether to take the VSRP package and, as such, their claim does not involve a decision of the Plan Administrator. For that reason, there was no need to limit review of the fiduciary duty claim to the administrative record, and the district court did not abuse its discretion to allow additional discovery.3

On December 28, 2000, the district court granted CNA's motion for summary judgment on the plaintiffs' claims of wrongful denial of benefits under ERISA (Count II), breach of ERISA and common law contract (Count IV) and equitable estoppel (Count V). On March 28, 2003, the district court granted CNA's motion for summary judgment on the plaintiffs' one remaining count, their breach of fiduciary duty claim (Count III). We review the district court's grants of summary judgment de novo. Hrobowski v. Worthington Steel Co., 358 F.3d 473, 475 (7th Cir.2004). To succeed on a motion for summary judgment, the moving party must show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. Rule 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In making this determination, "we draw all reasonable inferences from the evidence in the light most favorable to the nonmoving party." Williamson v. Ind. Univ., 345 F.3d 459, 462 (7th Cir.2003).

A. ERISA Violation for Failure to Pay Benefits (Count II)

1. Standard of review applicable to Plan Administrator's decisions

First, we must determine the appropriate standard for reviewing the decisions of the Plan Administrator. Ordinarily, "[a] denial of benefits will be reviewed de novo `unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan.'" Militello v. Cent. States, Southeast & Southwest Areas Pension Fund, 360 F.3d 681, 685 (7th Cir.2004) (quoting Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989)). If the plan's language "indicates with the requisite if minimum clarity that a discretionary determination is envisaged," Herzberger v. Standard Ins. Co., 205 F.3d 327, 331 (7th Cir.2000), "then a denial of benefits will be reviewed under an arbitrary and capricious standard." Militello, 360 F.3d at 685 (citing Hess v. Hartford Life & Accident Ins. Co., 274 F.3d 456, 461 (7th Cir.2001)).

The district court neatly sidestepped the question whether the provisions of the 1990 Plan or the provisions of the 1996 Plan were in effect at the time the benefits were denied. It did so by finding that the language in the 1990 Plan "indicate[s] with sufficient clarity that the Plan Administrator has the discretionary authority to interpret the Plan" and that, if anything, the 1996 Plan (which was adopted between the time the plaintiffs complained about the termination of the HCA benefit and the time the Plan Administrator responded to those complaints) "confers discretionary authority on the Plan Administrator even more clearly." (12/28/00 Order at 5 & n.5.) Thus, under either Plan, the arbitrary and capricious standard applies. We agree that it is unnecessary to determine which of the two Plans controls, because in addition to the district court's correct determination that the 1990 Plan conferred sufficient discretion on the Plan Administrator and that the 1996 Plan expanded it, the fact is that it doesn't matter which Plan controls or which standard of review is applicable. For the ultimate issue is whether the benefits were vested. If the benefits were vested, the denial of benefits would be wrongful even under an arbitrary and capricious standard; and if the benefits weren't vested, the denial of benefits would be lawful even under a de novo standard. We now proceed to the merits.

As they argued in the district court, the plaintiffs maintain that under the VSRP, which they believe was separate and distinct from the general retirement plan, they received a vested "lifetime" HCA benefit, and the Plan Administrator therefore violated ERISA when he terminated their HCA benefit. The district court rejected this argument by noting that employers are free to amend or terminate welfare benefits, which do not vest absent a showing of clear intent to vest in written plan documents. The VSRP was a modification of the general retirement plan (and the 1992 Retirement Guide was specifically incorporated into the VSRP). Hence, the reservation of rights clauses in the general retirement plan documents became part of the VSRP. The district court further found that the Brief Description Newsletter, which described the VSRP's enhanced benefits, did not create an ambiguity because the plaintiffs' interpretation of language in the Newsletter as vesting the HCA benefit (i.e., guaranteeing that the HCA benefit amount would never be reduced) was not reasonable.

We start from the premise that "[e]mployers ... are generally free under ERISA, for any reason at any time, to adopt, modify, or terminate welfare plans." Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73, 78, 115 S.Ct. 1223, 131 L.Ed.2d 94 (1995). For this reason, if ERISA welfare benefits "vest at all, they do so under the terms of a particular contract." Pabst Brewing Co. v. Corrao, 161 F.3d 434, 439 (7th Cir.1998). The Supreme Court, followed by several courts of appeals, has indicated that a modification that purports to vest welfare benefits must be contained in the plan documents and must be stated in clear and express language. See Inter-Modal Rail Employees Ass'n v. Atchison, Topeka & Santa Fe Ry. Co., 520 U.S. 510, 515, 117 S.Ct. 1513, 137 L.Ed.2d 763 (1997); Frahm v. Equitable Life Assurance Soc'y, 137 F.3d 955, 958 (7th Cir.1998) (citing Sprague v. General Motors Corp., 133 F.3d 388, 400 (6th Cir. 1998) (en banc) as sensibly extending the requirement of a writing to all long-term commitments); Gable v. Sweetheart Cup Co., Inc., 35 F.3d 851, 855-56 (4th Cir. 1994); Wise v. El Paso Natural Gas Co., 986 F.2d 929, 937 (5th Cir.1993). Given our presumption against the vesting of welfare benefits, silence indicates that welfare benefits are not vested. See Rossetto v. Pabst Brewing Co., 217 F.3d 539, 544 (7th Cir.2000) ("Our presumption against vesting, it is important to emphasize, kicks in only if all the court has to go on is silence."). Moreover, although ERISA itself "[left] open ... the possibility that a written plan may be combined with an oral promise, such as an undertaking to give a worker twice the benefits so established," wholly oral promises cannot be used to require the employer to provide irrevocable benefits. Frahm, 137 F.3d at 958. If there is some ambiguity in the language of the written agreement that is not disambiguated elsewhere in the document, only then may we consider evidence of the parties' intent that is "extrinsic" to the written documents, such as oral representations. See Rossetto, 217 F.3d at 547; Bidlack, 993 F.2d at 609.

a. The "lifetime" nature of the HCA benefit

The plaintiffs claim that all of the VSRP's enhanced benefits were vested, including the HCA, and that the HCA cannot be "carved out" of the VSRP package of vested retirement benefits. This contention is easily disposed of since the HCA benefit differs qualitatively from the VSRP's other enhanced benefits: it is a welfare benefit, as the plaintiffs concede (Appellants' Br. at 22-23), not a pension benefit. Thus, absent language expressly indicating that the HCA benefit is vested, it would not vest upon retirement.4

The plaintiffs argue that the VSRP documents indicate that the HCA is a "lifetime" benefit, and that this had been confirmed in oral representations made to them. Specifically, they assert that the personalized calculation worksheet, which states that eligible employees will receive an HCA allowance of $465 per month to age 65 and $180 per month thereafter, indicates that this benefit is "for life." (R. 109-2, ex. 10.) The payment election form, which prescribes the same HCA allowance amounts as appear on the personalized calculation worksheet and which allows eligible employees to choose to have their surviving spouses receive the HCA benefit after their death, is also offered for the implication that the benefits were for life (and even beyond). (R. 109-2, ex. 11.)

That the HCA benefit was a "lifetime" benefit — both for regular retirees and for retirees who accepted the VSRP package — is actually conceded by CNA. (Appellees' Br. at 27; 1992 Retirement Guide at 6.) The problem for the plaintiffs is that "lifetime" may be construed as "good for life unless revoked or modified." This construction is particularly plausible if the contract documents include a reservation of rights clause (which, as will be shown, is the case here). See UAW v. Rockford Powertrain, Inc., 350 F.3d 698, 704 (7th Cir.2003) ("We must resolve the tension between the lifetime benefits clause, and the plan termination and reservation of rights clauses, by giving meaning to all of them. Reading the document in its entirety, the clauses explain that although the plan in its current iteration entitles retirees to health coverage for the duration of their lives and the lives of their eligible surviving spouses, the terms of the plan — including the plan's continued existence — are subject to change at the will of [the employer]. The health insurance section of the plan description unambiguously does not provide the plaintiffs with vested lifetime health insurance benefits.") (internal citations omitted); Diehl v. Twin Disc, 102 F.3d 301, 307 (7th Cir.1996) ("[W]hen potentially conflicting provisions coexist ... within a single contract formed of several documents, the rule that contractual provisions be read as parts of an integrated whole will lead a court to seek an interpretation that reconciles those provisions."); see also In re Unisys Corp. Retiree Med. Benefit "ERISA" Litig., 58 F.3d 896, 904 (3d Cir.1995) ("An employer who promises lifetime medical benefits, while at the same time reserving the right to amend the plan under which those benefits were provided, has informed plan participants of the time period during which they will be eligible to receive benefits provided the plan continues to exist."); Chiles v. Ceridian Corp., 95 F.3d 1505, 1512 n. 2 (10th Cir.1996) ("[T]he weight of case authority supports the Unisys approach, that a reservation of rights clause allows the employer to retroactively change the medical benefits of retired participants, even in the face of clear language promising company-paid lifetime benefits."). As laypersons, the plaintiffs' confusion on this issue is understandable; it is also very unfortunate, if it was a basis for their accepting the VSRP package. But in the perhaps beady eyes of the law, the "lifetime" nature of a welfare benefit does not operate to vest that benefit if the employer reserved the right to amend or terminate the benefit, given "what it takes to overcome the presumption that welfare benefits do not vest, combined with [our] reluctance to interpret a contract as being at war with itself." Diehl, 102 F.3d at 307.

It is true that some of our decisions have indicated that the use of "lifetime" to denote the duration of benefits may create an ambiguity and is not tantamount to silence (with its presumption against vesting). See id. at 306 (finding that separate agreement containing entitlement to lifetime benefits modified reservation of rights clause incorporated from another agreement and entitled retirees to welfare benefits for their lifetime); Bidlack, 993 F.2d at 608 ("But the agreements are not silent on the issue; they are merely vague. They say that once retired employees reach the age of 65 the company will pick up the full tab for their health insurance and that when they die their spouses will continue to receive supplemental health benefits, again at the company's cost. This could be thought a promise to retired employees that they and their spouses will be covered for the rest of their lives."). However, none of those decisions involve situations where a reservation of rights clause is an integral part of the contract that provides the "lifetime" benefits. In Diehl, we found that the contract providing "lifetime" benefits "was an independent contract, supported by separate consideration and capable of modifying or supplanting prior contractual arrangements," such as the one that contained the reservation of rights clause. Diehl, 102 F.3d at 306-07. Here, the nature of the HCA as a "lifetime" benefit is not one of the enhancements created by the VSRP because the HCA is also a "lifetime" benefit for regular retirees according to the general retirement plan documents. Thus, unlike Diehl, the "lifetime" nature of the HCA benefit could not abrogate the reservation of rights clause included in the 1992 Retirement Guide and other general retirement plan documents because both were offered by the same contract. Moreover, the reservation of rights clause in Diehl provided an "unsure foundation of the putative right to discontinue" benefits. Id. at 308. The use of "lifetime" with respect to the VSRP's HCA benefit simply does not operate to vest that benefit for the early retirees. In Bidlack, the only reservation of rights clause applicable to the plan at issue was in a contract between the employer and an insurance company for the purchase by the former of health insurance sold by the latter. Bidlack, 993 F.2d at 606. We specifically found that clause inapplicable to the contract between the employees and the employer as to duration of benefits, the main issue in that case. Id. Thus, Bidlack did not involve the situation here where "lifetime" benefits were granted by the employer while the right to terminate or modify them was reserved. We have held that, when "lifetime" benefits are granted by the same contract that reserves the right to change or terminate benefits, the "lifetime" benefits are not vested. See Rockford Powertrain, 350 F.3d at 704.

The plaintiffs additionally argue that the Brief Description Newsletter's heading, "No reductions in the Retiree Health Care Allowance" indicated that the HCA benefit levels could not be altered. (Brief Description Newsletter at 2.) However, the paragraph accompanying that heading shows that no such promise was made. The paragraph reads:

The maximum Retiree Health Care Allowance is earned at age 62 after 25 years of service as an active employee. If you retire under the Voluntary Special Retirement Program, you will be credited with the maximum Retiree Health Care Allowance, even if you have less than 25 years of service or are under age 62."5

Id. With respect to the plaintiffs' contention here, we agree with the district court that the "plaintiffs' interpretation of the provision is not the most sensible one." (12/28/00 Order at 8-9.) In context, the heading in the Brief Description Newsletter refers to and rejects the reduced benefit amounts that would otherwise apply if an employee who does not meet the age and service requirements retires under the general retirement plan.6 Thus, the VSRP's enhancement to the regular retirement plan's HCA benefit was to ensure that the early retirees qualified for the maximum HCA amounts; it was not, and could not reasonably have been construed as, a promise to vest the HCA benefit at that maximum level for the remainder of the early retirees' lives. The plaintiffs' insistence to the contrary is unsupportable.

b. Reservations of rights clauses

The plaintiffs next argue that, as a separate and distinct program, the benefits in the VSRP were not subject to the reservations of rights clauses in the various general retirement plan documents, and that the documents specifically mentioning the VSRP did not contain reservation of rights clauses. However, regardless of how the plaintiffs believe the VSRP was marketed to the early retirees, their initial premise that the VSRP was separate and distinct from the general retirement plan is incorrect. This is evident from a review of the Brief Description Newsletter, which repeatedly refers to the general retirement plan in discussing the VSRP's enhanced benefits, making clear that the general retirement plan is the baseline program to which the VSRP's enhancements would be made.7 The plaintiffs themselves admit that the VSRP was a modification of the regular retirement plan. (Appellants' Br. at 32.) We also note that if the plaintiffs were correct that the VSRP was comprised only of those documents that specifically mentioned the VSRP, it would lack such fundamental prerequisites as administrative procedures and descriptions of the very benefits being offered.

Moreover, the Covering Memo specifically incorporated the 1992 Retirement Guide and its reservation of rights clause. The Covering Memo stated that "[r]etirement means a major change in lifestyle for most people, and you'll need to weigh the pros and cons carefully. The enclosed materials are intended to help you arrive at the right decision for you." (Covering Memo at 1.) One of the enclosed documents was the 1992 Retirement Guide, which eligible employees were told "provides information about the benefits available to you during retirement and highlights the decisions you need to make regarding those benefits." Id. Continental thus unambiguously stated in writing that the 1992 Retirement Guide, which included a reservation of rights clause, was part of the VSRP program and contained information about retirement benefits under the VSRP, including Continental's reserved right to alter or terminate those benefits. The reservation of rights clause appears in a box near the bottom of the last page of the 15-page document: "The coverages described in this Guide may be amended, revoked or suspended at the Company's discretion at any time, even after your retirement. No management representative has the authority to change, alter or amend these coverages."8 (1992 Retirement Guide at 15.) Although the plaintiffs argue that this reservation of rights clause on its face applies to "the coverages described in this Guide" and that the VSRP was not mentioned in the 1992 Retirement Guide, we noted earlier that the "lifetime" nature of the HCA benefit was set out in the 1992 Retirement Guide and that the HCA benefit's "lifetime" nature was not one of the VSRP's enhancements.

Although the 1992 Retirement Guide (with its applicable reservation of rights clause) was part of the VSRP, along with, as will be shown, the 1990 Plan and the annual SPDs available at the time the VSRP was offered, it is worth addressing CNA's argument that the lack of any reservations of rights clauses in the documents that mention the VSRP amounts to silence (with its presumption against vesting). If the benefits were not "lifetime" benefits, CNA would be correct. But, as we noted in Rossetto v. Pabst Brewing Co., "[i]f