## Facts

- Bernard Bertrang owned and operated an auto-body business in Watertown, South Dakota, doing business as “Bernie’s Body Shop.”
- Bertrang communicated a retirement benefit as a condition of employment: any employee who worked at least five consecutive years would be eligible, at age 62, to receive a lump-sum payment tied to years of service.
- The benefit was described in formula terms as $1,000 per year of service; the court found Bertrang also described the credits as $5,000 once an employee reached five years (covering the first five years) plus $1,000 for each additional year of employment thereafter, with payment at age 62.
- The arrangement was not reduced to writing and did not appear in any employment contract or other agreement.
- Bertrang kept no written plan records and made no annual reports concerning retirement benefits; no employee paycheck amounts were withheld or set aside to fund the benefit.
- One employee, Carl Matteson, worked for Bertrang for 11 years and, upon retirement, received $11,000 under the arrangement.
- Joseph Moeller worked for Bertrang for nearly 25 years but stopped working for the business before reaching age 62.
- Bertrang treated Moeller as ineligible for any retirement payment because he left before age 62, and Bertrang also asserted the benefit was conditioned on employees not “moonlighting” in similar work.
- Moeller sued Bertrang under ERISA, claiming the retirement promise constituted an ERISA-covered employee pension benefit plan and seeking benefits and related relief.

## Issues

1. Whether Bertrang’s oral, unwritten retirement promise of a lump-sum payment at age 62 based on years of service constituted an “employee pension benefit plan” governed by ERISA.
2. Whether the arrangement was excluded from ERISA coverage as an “excess benefit plan.”
3. If ERISA applied, whether Moeller could enforce rights under the plan despite Bertrang’s asserted conditions (including continued employment to age 62 and a prohibition on moonlighting).

## Decision

- The court held, after a bench trial, that Bertrang had established and maintained an employee pension benefit plan within the meaning of ERISA, even though the plan was informal and unwritten.
- The court rejected Bertrang’s argument that the arrangement was an “excess benefit plan” outside ERISA’s coverage.
- Treating the dispute as an ERISA benefits action, the court ruled in Moeller’s favor on liability and concluded Moeller was entitled to ERISA relief based on the retirement plan promise and his years of service.

## Legal Principles

- An employer’s promise can constitute an ERISA “plan, fund, or program” if it is established or maintained to provide retirement income or results in deferral of income until termination of employment or beyond, even if the promise is oral and informal.
- ERISA coverage turns on the substance and operation of the benefit arrangement (including a service-based formula and retirement-age payment), not on the presence of formal written plan documents, bookkeeping, or advance funding.
- The “excess benefit plan” exclusion is limited to arrangements maintained solely to provide benefits exceeding Internal Revenue Code limits; a general retirement promise offered as the employer’s retirement benefit does not fit that exclusion.
- Once an arrangement is found to be an ERISA pension plan, claims for benefits and disputes about eligibility are addressed through ERISA’s civil enforcement provisions rather than state-law contract theories.

## Conclusion

Moeller v. Bertrang held that an employer’s oral, unwritten promise to pay employees a lump-sum retirement benefit at age 62 calculated by years of service created an ERISA-covered employee pension benefit plan, was not excluded as an excess benefit plan, and supported ERISA relief for the long-time employee.


Moeller v. Bertrang, 801 F. Supp. 291 (1992)