Relabeling Benefits as “Equity” Won’t Save a § 502(a)(3) Claim; § 105(a) Statements Need Not Include Vesting Date for Terminated Participants

Court: United States Court of Appeals for the Third Circuit (Not Precedential)
Date: October 10, 2025
Case: Alice M. Carr v. Jefferson Defined Benefit Plan; Abington Memorial Hospital; The Pension Plan of Abington Memorial Hospital; Thomas Jefferson University (No. 24-2574)
Opinion by: Judge Hardiman

Introduction

This appeal arises from an ERISA benefits dispute concerning vesting credits for part-time service and the scope of remedies available under ERISA’s civil enforcement provisions. Alice M. Carr, a former Abington Memorial Hospital employee, sought (1) benefits under ERISA § 502(a)(1)(B), (2) penalties for delayed disclosure under ERISA § 105(a) (29 U.S.C. § 1025(a)), and (3) equitable relief for alleged fiduciary breaches under § 502(a)(3). The district court dismissed the equitable count as duplicative of the benefits claim, later entered summary judgment upholding the benefits denial under arbitrary-and-capricious review, and awarded Carr a limited penalty for a 37-day delay in furnishing a pension benefit statement. Carr alone appealed.

The Third Circuit affirmed across the board. The court emphasized that plaintiffs cannot salvage a § 502(a)(3) claim by rebranding a straightforward benefits request as “equitable” relief (e.g., calling it a “surcharge”), clarified what satisfies a pension benefit statement for a terminated participant under § 105(a), and endorsed a disciplined approach to procedural issues (Rule 59(e), motions to amend, and excusable neglect for late answers).

Summary of the Opinion

• Count I (Benefits under § 502(a)(1)(B)): Affirmed. The plan’s denial of benefits was not arbitrary or capricious, particularly given reliance on third-party service-hour records; Carr could not establish the disputed 1997 hours to meet vesting requirements.
• Count II (Disclosure penalties under § 105(a) and § 502(c)(1)): Mixed below; affirmed on appeal. The administrator’s December 22, 2021 letter qualified as a “pension benefit statement” and need not include the earliest vesting date for a terminated employee. Personnel/wage records and plan valuation materials fell outside § 105(a). The district court’s monetary penalty for a 37-day delay ($4,070) remained intact (no cross-appeal).
• Count III (Equitable relief under § 502(a)(3)): Dismissal affirmed. Carr’s “injunctive” claim was merely a repackaged benefits claim. Using the label “surcharge” did not create a distinct equitable remedy.
• Procedural rulings:
  • Refusal to entertain Carr’s untimely Rule 59(e) motion was correct; the underlying order was not a “judgment,” making Local Rule 7.1(g)’s reconsideration deadline controlling.
  • No error in denying leave to amend where Carr neither requested it formally nor submitted a proposed amended complaint.
  • No abuse of discretion in refusing to strike Defendants’ late answer; the court reasonably found excusable neglect and no prejudice under Pioneer.

Analysis

Precedents Cited and Their Influence

• Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002): Central to the court’s rejection of Carr’s § 502(a)(3) theory. Great-West limits “equitable relief” to historically equitable categories and excludes claims for money owed under a contract or specific performance of past-due monetary obligations. The panel quoted Great-West’s caution against “lawyerly inventiveness” that relabels legal damages as equity, and applied it to Carr’s attempt to cast a benefits award as an “injunction” or “surcharge.”
• CIGNA Corp. v. Amara, 563 U.S. 421 (2011): Carr invoked Amara to argue for an “equitable surcharge.” The Third Circuit noted that whether surcharge is available under § 502(a)(3) remains the subject of a circuit split, but declined to reach the question because Carr sought no meaningful relief beyond the benefits themselves.
• Split on “surcharge” under § 502(a)(3):
  • Rose v. PSA Airlines, Inc., 80 F.4th 488 (4th Cir. 2023), cert. denied, 144 S. Ct. 1346 (2024): Treats surcharge as essentially damages and thus unavailable under § 502(a)(3).
  • Gimeno v. NCHMD, Inc., 38 F.4th 910 (11th Cir. 2022): Holds surcharge may be available as equitable relief for fiduciary breach.
  The panel acknowledged the split but found resolution unnecessary because Carr’s “surcharge” request did not seek a distinct equitable remedy.
• Split on alternative pleading under §§ 502(a)(1)(B) and (a)(3):
  • LaRocca v. Borden, Inc., 276 F.3d 22 (1st Cir. 2002): Suggests § 502(a)(3) is unavailable where § 502(a)(1)(B) provides a remedy.
  • Silva v. MetLife, 762 F.3d 711 (8th Cir. 2014): Permits alternative pleading.
  Again, the Third Circuit sidestepped the split because Carr’s purported equitable claim duplicated her benefits claim.
• Perelman v. Perelman, 793 F.3d 368 (3d Cir. 2015); Hughes Aircraft Co. v. Jacobson, 525 U.S. 432 (1999); Thole v. U.S. Bank N.A., 590 U.S. 538 (2020): These authorities foreclose disgorgement of plan “profits” by a participant in a defined benefit plan. Participants lack a claim to specific plan assets, any surplus inures to the employer, and there is no identifiable res to support equitable restitution. The panel applied these principles to reject Carr’s undeveloped disgorgement plea.
• Fletcher-Harlee Corp. v. Pote Concrete Contractors, Inc., 482 F.3d 247 (3d Cir. 2007): A plaintiff seeking leave to amend must attach a proposed amended complaint; courts are not obliged to grant sua sponte leave outside civil rights cases. The panel applied this rule to uphold dismissal without leave to amend.
• Pioneer Investment Services Co. v. Brunswick Associates Ltd. Partnership, 507 U.S. 380 (1993): Provides the “excusable neglect” framework (length of delay, reason, good faith, prejudice). The panel affirmed the district court’s application, finding no prejudice and permissible neglect supporting acceptance of a late answer.
• Rules 54 and 59(e): FRCP 59(e) applies to “judgments” (orders from which an appeal lies). The dismissal of a single count in a multi-count case is not a final judgment absent Rule 54(b) certification; thus Carr’s motion was properly treated as an untimely motion for reconsideration under Local Rule 7.1(g).

Legal Reasoning

1) Equitable relief under § 502(a)(3) cannot duplicate a benefits claim. The court compared Carr’s remedies across Counts I and III. In Count I, she sought “the maximum past and future retirement benefits” due under the plan. In Count III, she requested an injunction “enjoining Defendants from denying [her] entitlement to the maximum retirement benefits.” Because both counts sought the same ultimate relief—payment of benefits—Count III was, in the court’s words, “a claim for her pension benefits dressed in the cloak of equity.” Under Great-West, claims for money owed under a plan are not “typically available in equity,” and clever labels (e.g., “surcharge”) cannot convert legal claims into equitable ones. The panel therefore affirmed dismissal of Count III as duplicative without reaching unsettled questions about surcharge or alternative pleading.

2) The § 105(a) pension benefit statement was substantively adequate for a terminated participant. The December 22, 2021 letter listed both accrued and nonforfeitable benefits and was written to be understood by the average participant. Although it did not state the earliest date benefits would become nonforfeitable, the court found that omission immaterial for a terminated former employee who “could be fairly charged with knowing that her benefits could not possibly vest after her discharge.” The court also rejected Carr’s attempt to expand § 105(a) to compel production of personnel and wage records or a pension valuation; the statute requires only a “pension benefit statement,” not an array of underlying employment or actuarial documents. The district court’s $4,070 penalty for a 37-day delay was unaffected on appeal because only Carr appealed and she did not contest that part of the judgment; the amount reflects a per diem penalty consistent with § 502(c)(1).

3) Benefits denial was not arbitrary or capricious. The panel affirmed the district court’s conclusion that the plan’s denial—premised on third-party service-hour summaries—survived deferential review. The parties agreed Carr had four credited years (2003, 2010, 2011, 2012) and disputed 1997; the administrator’s reliance on the administrative record, including third-party-maintained reports, was not arbitrary or capricious.

4) Procedural rulings were sound.

• Rule 59(e) vs. reconsideration: Because dismissal of Count III was not a final, appealable judgment, Carr’s post-judgment motion was properly treated as a reconsideration motion and denied as untimely under the local rule.
• Leave to amend: Carr neither requested leave to amend nor supplied a proposed amended complaint; under Fletcher-Harlee, dismissal without sua sponte leave was proper.
• Late answer: Applying Pioneer, the court found excusable neglect and no prejudice; rejection of Carr’s motion to strike was therefore not an abuse of discretion.

Impact

• On ERISA pleading strategy: In the Third Circuit, plaintiffs cannot rely on “lawyerly inventiveness” to keep a § 502(a)(3) count alive when it seeks the same dollars as a § 502(a)(1)(B) benefits claim. To survive, an (a)(3) claim should target genuinely distinct equitable relief—e.g., plan reformation, estoppel, or plan-wide injunctive obligations—not simply “benefits by another name.” This decision reinforces a gatekeeping function without resolving broader circuit splits on surcharge or alternative pleading.
• On plan administration and disclosures: For terminated participants, a clear statement of accrued and nonforfeitable benefits can satisfy § 105(a) even if it omits the earliest vesting date (which is functionally moot after termination). That said, timeliness remains critical; the affirmed penalty for a 37-day delay underscores the financial risk of even short-term noncompliance. Administrators should calendar and track § 105(a) response deadlines rigorously.
• On the scope of § 105(a): The subsection does not open the door to employment records, wage histories, or actuarial valuations. Participants seeking such materials must rely on other statutory or procedural mechanisms, not § 105(a).
• On remedies in defined benefit plans: Disgorgement theories face structural barriers. Participants lack a claim to specific plan assets or investment profits; absent an identifiable res, equitable restitution is unavailable (Great-West, Perelman, Thole).
• On litigation practice: Parties should correctly style post-order motions and heed local timetables. Plaintiffs seeking amendment should attach a proposed amended complaint. Defendants who miss deadlines may nevertheless avoid default or striking of pleadings if they can satisfy Pioneer and demonstrate no prejudice.

Complex Concepts Simplified

• ERISA § 502(a)(1)(B): Lets a participant sue to recover benefits due under the plan’s terms. Think “I’m owed benefits under the contract; pay me.”
• ERISA § 502(a)(3): A catchall for “appropriate equitable relief” to redress statutory or fiduciary breaches (e.g., injunctions, reformation, equitable estoppel). It does not generally allow the court to order ordinary money damages.
• “Equitable surcharge”: Historically, an equitable remedy in trust law allowing beneficiaries to recover for a fiduciary’s breach. Modern ERISA cases disagree whether this is available under § 502(a)(3); even where potentially available, it must be truly equitable and tied to a fiduciary breach—not simply a relabeled benefits claim.
• ERISA § 105(a) (29 U.S.C. § 1025(a)) “pension benefit statement”: A participant’s right to a statement that discloses accrued and nonforfeitable benefits in an understandable way. It does not obligate the plan to produce personnel files, wage records, or actuarial valuations.
• Arbitrary-and-capricious review: A deferential standard: the court asks whether the plan’s decision had a rational basis in the administrative record, not whether the court would have decided differently.
• Defined benefit plan: Promises a fixed benefit at retirement; participants don’t own specific plan assets. Investment gains or surpluses generally accrue to the employer, not individual participants.
• Excusable neglect (Pioneer): A flexible test considering the reason for delay, its length, good faith, and prejudice to the opponent. It can excuse late filings absent meaningful prejudice or bad faith.

Conclusion

The Third Circuit’s non-precedential decision in Carr offers practical clarity on several ERISA fault lines without resolving contested doctrinal splits. Most prominently, it reaffirms that § 502(a)(3) is not a back door to benefits: when a plaintiff’s equitable count seeks the very same remedy as a § 502(a)(1)(B) claim, it will be dismissed as duplicative under Great-West. The court also provides pragmatic guidance for § 105(a): a letter that clearly communicates accrued and nonforfeitable benefits suffices for a terminated participant, and the statute doesn’t compel production of underlying employment or valuation records. Finally, the opinion underscores disciplined motion practice (Rule 59(e) vs. reconsideration, the need to attach proposed amendments) and confirms that late pleadings may be excused in the absence of prejudice.

For practitioners, the takeaways are straightforward: plead distinct equitable theories if you truly need § 502(a)(3); don’t expect § 105(a) to serve as a broad discovery tool; file timely and with the correct procedural vehicle; and, for administrators, ensure prompt and plain-language disclosures to avoid avoidable penalties.