David Day v. At&t Disability Income Plan

I. Background

David Day began working for Pacific Bell Telephone Com- pany, a subsidiary of AT&T Inc., in 2000. As an AT&T employee, he participated in the AT&T Pension Benefit Plan and the AT&T Disability Income Plan (the “Plan”).1 In Febru- ary 2005, he stopped working because of a disability. He began receiving LTD benefits under the Plan, and for reasons not relevant here, AT&T terminated Day’s employment in August 2005.

In October 2005, Day chose to roll over his pension bene- fits into an IRA. In accordance with his election, the AT&T Pension Benefit Plan administrator sent Day a check in the lump sum amount of $17,203.93, payable to the trustee of his

IRA.

In August 2008, Sedgwick Claims Management, Inc. (Sedgwick), the Plan’s claims administrator, determined that Day’s LTD benefits would be reduced by the amount of the rollover. The Plan provided that LTD benefits would be “re- duced by . . . pension benefits you may receive from any SBC company pension plan” (emphasis added). The Plan stated:

If you are eligible and apply for pension benefits (including a Disability Pension, if applicable), your pension benefit, to the extent paid to you, will be subtracted from…