United States Court of Appeals
                           FOR THE EIGHTH CIRCUIT
                                 ___________

                                 No. 96-2429
                                  ___________
Kent P. Barker; Carla J.              *
McAndrews;                            *
Martin J. Timmons, on behalf of       *
themselves and all others             *
similarly                             *
situated,                             *
                                      *   Appeal from the United States
                     Plaintiffs -     *   District Court for the
Appellants,                           *   District of Minnesota.
                                      *
                                      *
                                      *
      v.                              *
                                      *
Ceridian Corporation, a Delaware      *
corporation, individually and as      *
successor in interest to Control      *
Data Corporation,

                     Defendant -
Appellee.
                                 ___________

                      Submitted: February 13, 1997
                                     Filed: August 26, 1997
                               ___________

Before McMILLIAN, JOHN R. GIBSON, and FAGG, Circuit Judges.
                               ___________

JOHN R. GIBSON, Circuit Judge.

      Appellants, a certified class of disabled employees who receive
disability benefits under a long-term disability plan, appeal the district
court's grant of summary
judgment for their employer, Ceridian Corporation, that allowed Ceridian
to stop paying the employees' health, dental, and life insurance premiums.
The employees bring their claim under the Employee Retirement Income
Security Act of 1974, 29 U.S.C. §§ 1001-1461 (1994). They argue that the
district court's grant of summary judgment was erroneous because Ceridian
provided vested disability benefits and did not unambiguously reserve the
right to retroactively change the level of disability benefits that
employees would receive in the future.       They further argue that the
extrinsic evidence they submitted created a genuine issue of material fact
concerning Ceridian's right to change disability benefits retroactively.
Because the long-term disability plan does not unambiguously reserve to
Ceridian the right to change the disability benefits retroactively, a
genuine issue of material fact exists.       Accordingly, we reverse the
district court's judgment and remand for additional discovery and a trial.

      Appellants Kent P. Barker, Carla J. McAndrews, and Martin J. Timmons
represent a class of disabled employees of Ceridian Corporation. The class
includes all employees of Ceridian, formerly known as Control Data
Corporation,1 who were disabled before January 1, 1991 for whom Ceridian
paid health, life, and dental insurance premiums on or before December 31,
1993.2 Until December 31, 1993, Ceridian paid each class member's premiums
for the life, health, and dental insurance in which they were enrolled at
the time they became disabled. Ceridian also paid the disabled employees
60% of their pre-disability wage. Beginning January 1, 1994, Ceridian
stopped paying the premiums and required the employees to pay their own
premiums to continue their insurance coverage.




   1
    Ceridian is the successor-in-interest to Control Data Corporation. Therefore, we
will refer to the appellee as Ceridian.
       2
     The class specifically excluded those individuals who were members of the class
in Chiles v. Ceridian Corporation, Inc., a suit filed in the United States District Court
for the Western District of Oklahoma. An opinion regarding this class action is
recorded at 

(10th Cir. 1996).
                                           -2-
      Appellants brought this action alleging that Ceridian's refusal to
continue paying their insurance premiums violates ERISA. The parties'
arguments revolve around the ERISA plans offered by Ceridian. Years ago,
Ceridian adopted several benefit plans for its employees, including a
health care plan, dental assistance plan, life insurance plan, and
disability plan. Formal plan documents described each plan. In addition,
as required by ERISA, 29 U.S.C. § 1022 (1994), Ceridian provided its
employees with a summary plan description for each plan that described the
various benefits offered by the plans and claim procedures. For several
years the company issued summary plan descriptions to employees in separate
booklets for each type of benefit, but starting in 1989 Ceridian combined
the summary plan descriptions for all of the various plans into a single
benefits manual.

      Before 1989 the Disability Income Protection summary plan
descriptions summarized three disability plans: sick leave, short-term
disability, and long-term disability.      Under the long-term disability
plans, disabled employees were eligible for long-term disability status
beginning after their fifth consecutive month of disability. Employees who
qualified under this plan were entitled to up to 60% of their pre-
disability salary. The summary plan descriptions also provided: "While
on Long-Term Disability Status the company will pay the premiums for all
the company-sponsored benefits (medical, life, and dental) for which you
and your dependents were enrolled before your disability began.         The
company will continue paying all premiums until you and your dependents are
no longer eligible for the plans."3         A chart in the summary plan
descriptions reiterated Ceridian's promise to pay the disabled employees'
insurance premiums. The formal document for the long-term disability plan,
however, did not contain any reference to the terms, conditions, or
descriptions of health, dental, or life




      3
        The quoted language is from the 1986 Disability Income Protection summary
plan description. The language of the 1983 summary plan description is slightly
different, though substantively the same.
                                       -3-
insurance benefits. During the period before 1989 the individual plan
documents for the dental, life, and health insurance plans also stated that
Ceridian would pay the insurance premiums during the employee's disability.


      The plans in effect before 1989 also contained provisions discussing
plan amendment and termination. The Disability Income Protection summary
plan descriptions provided: "Control Data expects to continue the Long-
Term Disability Plan indefinitely, but must reserve the right to change or
discontinue it if it becomes necessary. This would be done only after
careful consideration." The amendment and termination language in the
formal plan document differed slightly from the language in the summary
plan descriptions.    The formal plan allowed plan amendments if deemed
advisable by Ceridian and reserved Ceridian's right to terminate the plan
at any time.

      The Long-Term Disability Plan's reservation of rights provision
included additional language relevant to this action. Before 1989 the
disability summary plan descriptions expressly provided: "If the group
Long-Term Disability Plan terminates, and if on the date of such
termination you are totally disabled, your Long-Term Disability benefits
and your claim for such benefits will continue as long as you remain
totally disabled as defined by the plan." The formal long-term disability
plan made the same promise. This language was not found in the documents
for the dental, health, or life insurance benefit plans. Instead, the termination
provision in the 1984 summary plan description of the dental and life insurance plan, and the 1983 summary plan
description of the health care plan provided: "If, while you or your dependents are covered under this plan, the
plan terminates or the class of employees of which you are a member has its coverage terminated, then no benefits
(including extended benefits) will be payable to you for any charges, fees, or expenses incurred on or after that
date of termination of the policy or termination of the class." The 1984 life insurance summary plan description
included the same provision.




                                                      -4-
      Effective January 1, 1989, Ceridian issued an employee benefits
manual that combined the summary plan descriptions for its employee benefit
plans.   The disability section of the 1989 Benefits Manual repeated
Ceridian's agreement to pay the health, life, and dental insurance premiums
of disabled employees.    However, the 1989 Benefits Manual contained a
different reservation of rights provision: "While [Ceridian] plans to
continue these plans and programs, it reserves the right to change or
cancel them at any time." The manual made no mention of Ceridian's promise
to continue paying disability benefits if Ceridian terminated the plan, as
promised in previous Long-Term Disability summary plan descriptions. The
formal Long-Term Disability Plan in effect at that time, however, continued
to contain this agreement: "Notwithstanding termination of the Plan, a
Participant who is Totally Disabled on the effective date of the Plan
termination and is otherwise entitled to benefits hereunder, shall continue
to receive benefits in accordance with the terms of the Plan."

      In 1991, Ceridian issued a new employee benefits manual that stated
that Ceridian would no longer pay the health, dental, and life insurance
premiums for employees who became disabled on or after January 1, 1991.
Ceridian told Barker, a class representative, that this change only applied
to employees who became disabled on or after January 1, 1991. This change
did not affect the benefits Ceridian paid to the class members, which
included 60% of their pre-disability wage and 100% of their life, health,
and dental insurance premiums.
      In 1992, Ceridian changed its long-term disability plan again.
Effective January 1, 1992, Ceridian allowed active, non-disabled employees
to choose to pay a higher disability premium in return for an increase in
their long-term disability income benefit to 70% of their pre-disability
earnings. Ceridian again explained to Barker that this change only applied
prospectively.
      In the fall of 1993, Ceridian notified the disabled employees that
it would stop paying 100% of their health, life, and dental insurance
premiums beginning January 1,




                                    -5-
1994. The disabled employees then brought this action. The district court
held that the employees had no vested interest in company-paid premiums
because the plan documents showed that Ceridian had no specific intent to
be unconditionally bound in the future.       Further, the district court
concluded that the termination and amendment clauses included in the plan
documents defeated the employees' claim for vested insurance premium
benefits. Even if the language in the plans was ambiguous and could be
interpreted as expression of an intent to provide vested company-paid
premiums to disabled employees, the district court concluded that the only
extrinsic evidence in the record reflected Ceridian's intent to reserve its
right to change all aspects of the plan. Accordingly, the district court
granted summary judgment for Ceridian.

      On appeal, the disabled employees argue that the district court's
grant of summary judgment was erroneous because Ceridian provided vested
disability benefits and did not unambiguously reserve the right to change
the level of disability benefits retroactively. The employees also contend
that the extrinsic evidence they submitted creates a genuine issue of
material fact concerning Ceridian's right to change disability benefits
retroactively. Ceridian argues that the plan documents did not provide a
vested right to 100% payment of the insurance premiums and that Ceridian
unambiguously reserved its right to change or terminate the welfare
benefits paid to the disabled employees.
      We review de novo a grant of summary judgment. See McKee v. Federal
Kemper Life Assurance Co., 

, 328 (8th Cir. 1991). Summary
judgment is appropriate if "there is no genuine issue as to any material
fact and . . . the moving party is entitled to judgment as a matter of
law." Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 

, 323
(1986). We construe the factual record and all reasonable inferences from
the record in the light most favorable to the party opposing summary
judgment. See Schrader v. Royal Caribbean Cruise Line, Inc., 

, 1013 (8th Cir. 1991). In interpreting the terms of this ERISA Plan,
it is appropriate to apply




                                    -6-
a de novo standard of review, see Firestone Tire & Rubber Co. v. Bruch, 

, 115 (1989), "giving the language its common and ordinary meaning
as a reasonable person in the position of the [plan] participant, not the
actual participant, would have understood the words." Chiles v. Ceridian
Corp., 

, 1511 (10th Cir. 1996) (quotations omitted).

                                    I.

      ERISA distinguishes between two kinds of employment benefits--welfare
benefits and pension benefits. See 29 U.S.C. § 1002(1)-(2) (1994). The
employees concede that the plans at issue before us are employee welfare
benefit plans.    Though pension plans are subject to mandatory vesting
requirements, see 29 U.S.C. § 1053 (1994), welfare plans are not subject
to such standards, and employers generally are free to amend or terminate
these plans unilaterally. See Curtiss-Wright Corp. v. Schoonejongen, 

, 78 (1995); Jensen v. SIPCO, Inc., 

, 949 (8th Cir.
1994), cert. denied, 

(1995). However, the simple fact that
ERISA does not require vesting of welfare benefit plans does not mean that
a welfare benefit plan will never vest.      An employer and employee may
contract for post-employment welfare benefits that vest. See In re White
Farm Equip. Co., 

, 1193 (6th Cir. 1986).

      ERISA requires that employee benefit plans be established by a
written instrument. See 29 U.S.C. § 1102(a)(1). Therefore, any promise
to provide vested benefits must be "incorporated, in some fashion, into the
formal written ERISA plan." 

(quotation omitted).
Summary plan descriptions are considered part of ERISA plan documents.
See 

to employees is one of ERISA's major purposes.
See 

Because of the importance of disclosure, in the event of
a conflict between formal plan provisions and summary plan provisions, the
summary plan description provisions prevail. See 

interpreting ERISA plan documents, we look to the law of trusts:
"The terms of trusts created by written instruments are 'determined by the
provisions of the instrument as interpreted in light of all the
circumstances and such other evidence of the intention of the settlor with
respect to the trust as is not inadmissable.'" 

(quoting 

). In determining if other evidence is admissible we look
to the language of the plan provision at issue and consider whether the
provision is ambiguous:

     that intent [of the settlor] is first sought by careful
     examination of the trust clause in question, giving the words
     in that clause their ordinary meanings. If the construction
     question cannot be resolved by reference to the clause alone,
     the court will examine the entire trust instrument to determine
     the creator's intent and purposes. . . . [T]he third step
     becomes necessary when the intent or meaning of the settlor.
     . . . cannot be determined by reference to the provisions of
     the trust instrument itself.      Extrinsic evidence will be
     admitted by the court to assist it in determining the meaning
     and effect of the particular clause.

                                   II.

      As described above, the reservation of rights clauses in the long-
term disability plans provided that if the plans terminated Ceridian would
continue paying disability benefits to those totally disabled at the time
of the plan termination. This differed from the reservation of rights
clauses in the health, dental, and life insurance plans, which simply
provided that Ceridian might change or discontinue the plans if it became
necessary. Therefore, to determine which reservation of rights provisions
apply to the disabled employees' claims, we must determine the source of
Ceridian's promise to pay the insurance premiums.




                                    -8-
      The employees contend that the promise to pay the insurance premiums
stems from the long-term disability plan itself. The 1983 and 1986 plans
made several references to the health, dental, and life insurance premiums.
For example, the plans provided that while an employee is on long-term
disability status Ceridian will pay all the medical, life, and dental
benefits for which the employee and dependents were enrolled before the
disability began. The plans also provided a chart summarizing benefits
available during disability. Each of these charts expressly provided that
Ceridian would pay premiums for health, dental, and life insurance programs
for employees on long-term disability status.

      Ceridian points to the plan documents for the health, dental, and
life insurance plans that discuss how the respective benefits will be
handled during a period of disability. In light of this language, Ceridian
argues that its liability for payment of insurance premiums comes from the
separate insurance coverage plans. Ceridian contends the disability plan
is simply for income protection, and does not in its own afford a right
to the insurance premiums.

      In considering the conflicting arguments, we reiterate that we apply
a de novo standard of review to interpret the terms of a plan and give the
plan’s language the "common and ordinary meaning . . . a reasonable person
in the position of the [plan] participant, not the actual participant,
would have understood the words." See 

.
      We hold that a reasonable person in the position of a plan
participant would believe the language of the disability summary plan
descriptions assured payment of the various insurance premiums.         "A
[summary plan description] is intended to be a document easily interpreted
by a layman; an employee should not be required to adopt the skills of a
lawyer and parse specific undefined words throughout the entire document
to determine whether they are consistently used in the same context." 

The long-term disability summary plan descriptions repeatedly
promise that




                                    -9-
Ceridian will pay company-sponsored insurance premiums. In 1989 only the
long-term disability summary plan description contained the promise to pay
the insurance premiums. The individual life, health, and dental insurance
plans did not promise that Ceridian would continue to pay insurance
premiums for employees who become disabled.

      Finally, in response to Ceridian's argument that the disability plan
benefits only include income protection, in a real sense requiring disabled
employees to pay their insurance premiums out of their 60% salary
replacement benefit increases their income loss. See 

. Indeed, Ceridian's prospective plan amendment in 1992 that allowed
disabled employees to receive 70%, rather than 60%, of their pre-disability
earnings, may well have been intended to help compensate for Ceridian's
1991 plan change that required employees who became disabled after January
1, 1991 to pay part of their own insurance premiums. A reasonable person
in the position of a plan participant would conclude upon reading the plans
that the long-term disability plan, and not the individual health, life,
and dental insurance plans, provide payment of the insurance premiums. Cf.

(not possible to determine from the language of the long-
term disability plan what benefits the plan includes, and therefore issue
is not appropriate for summary judgment).

                                    III.
      Now that we have determined which plans control our analysis, we turn
to the employees' argument that Ceridian's promise to pay insurance
benefits until they were no longer disabled vested at the time the
employees became disabled, and that Ceridian did not unambiguously reserve
the right to change the level of disability benefits retroactively.
Because welfare benefits do not statutorily vest under ERISA, the employees
carry the burden of showing an agreement or other demonstration of employer
intent to vest benefits. See Houghton v. SIPCO, Inc., 

, 957
(8th Cir. 1994).




                                   -10-
      In support of their argument the employees cite Local Union No. 150-
A, United Food & Commercial Workers International Union v. Dubuque Packing
Co, 

(8th Cir. 1985). They argue that this case provides that
benefits are vested when receipt of benefits depends on an employee's
status. In Dubuque Packing, the court first looked at the language in the
plan documents and determined that the language was ambiguous.       After
examining the extrinsic evidence, the court concluded that the plaintiffs
had proved that the parties intended the benefits to vest when the parties
retired. 

Dubuque Packing thus stands for the proposition that
parties can intend to provide vested benefits. We therefore look to see
whether there was an intent to provide vested benefits in this case.
Because welfare benefits do not automatically vest as a matter of law, the
issue is "simply one of contract interpretation," Anderson v. Alpha
Portland Indus., Inc., 

, 1516 (8th Cir. 1988), cert. denied,

(1989), which is a question of law. See Dubuque 

. Where a contract is ambiguous, a court may weigh extrinsic
evidence to assist in construing the language. See 

of the 1986 disability income protection summary plan
description provides: "While on Long-Term Disability Status the company
will pay the premiums for all the company-sponsored benefits (medical,
life, and dental) for which you and your defendants were enrolled before
your disability began. The company will continue paying all premiums until
you and your dependents are no longer eligible for the plans."          The
language of the 1983 summary plan description and the 1985 formal plan make
the same promise. The 1983 and 1986 disability summary plan descriptions,
however, state: "[Ceridian] expects to continue the Long-Term Disability
Plan indefinitely, but must reserve the right to change or discontinue it
if it becomes necessary.        This would be done only after careful
consideration." The 1989 disability summary plan description contains a
similar reservation of rights provision.




                                   -11-
      In short, we are faced with a clause that provides that Ceridian will
pay insurance premiums until an employee is no longer disabled or no longer
eligible for the plan and a reservation of rights clause that allows
Ceridian to change or discontinue the plan. The conflict between these
clauses brings us face to face with difficult contract interpretation
questions. Several courts have considered similarly conflicting clauses
and have not answered this puzzling question uniformly. See, e.g., Diehl
v. Twin Disc, Inc., 

, 306-09 (7th Cir. 1996); 

-14; In re Unisys Corp. Retiree Med. Benefit ERISA Litig., 

, 902-905 (3rd Cir. 1995); Gable v. Sweetheart Cup Co., Inc., 

, 855-58 (4th Cir. 1994), cert. denied, 

(1995); Bidlack
v. Wheelabrator Corp., 

, 605-10 (7th Cir.), cert. denied, 

(1993).     This court recently has addressed this question in
Jensen.
      In Jensen, a class of retired employees brought suit against SIPCO,
their employer, after SIPCO changed its medical benefit plan for retirees.
The plan at issue provided that SIPCO would pay medical benefits until a
retiree died, or a spouse divorced, or a child married or reached age

. Observing that this promise was "at most an ambiguous expression
of an intent to vest retiree benefits," 

considered the plan's reservation of rights clauses, which
provided, "[T]he Company shall have the right and power to alter, amend, or annul any of the provisions of this
. . . Plan . . . . Unless otherwise expressly provided therein, amendments shall not be applicable to persons who
are receiving pensions hereunder prior to the effective date of such amendment." 

Focusing on the
language which allowed SIPCO to amend or terminate "any of the provisions of th[e] . . . Plan," we held that the
reservation of rights provisions at issue were not free from ambiguity. 

. We observed that "the question
at this stage of the analysis is whether these provisions are so unambiguous as to make unnecessary any reference
to other Plan provisions and extrinsic evidence." 

that the reservation of rights clauses were "not
facially unambiguous--they leave at least some doubt as to whether SIPCO intended to reserve the right to change
or terminate benefits to already retired pensioners, or only




                                                      -12-
the right to make prospective changes for those covered by the Plan but not yet retired." 

the
ambiguity in the plan, we held that the district court properly considered the extrinsic evidence. 

of rights clauses in Jensen and in the plans before us today are materially
indistinguishable. Both plans provided a welfare benefit until a person was no longer eligible for the plan, yet
retained the right to amend or terminate the plan. Jensen thus controls our analysis, and we hold that Ceridian's
plans are ambiguous concerning whether Ceridian can retroactively change benefits to disabled employees. See
also American Fed'n of Grain Millers v. International Multifoods Corp., 

, 980 (2d Cir. 1997) (to
reach a trier of fact it is enough to point to written language that could be interpreted as a promise to vest the
recipient's benefits).

          Ceridian attempts to distinguish Jensen, arguing that the reservation of rights clauses in the two cases
differ. Specifically, Ceridian contends that the language in SIPCO's plan states that plan amendments would not
apply to persons who are receiving pensions before the date of the amendment unless the amendment said so
expressly. Ceridian says this clause made the reservation of rights clauses in Jensen more ambiguous than the
clause before us. Jensen, however, did not mention this part of the termination clause in its discussion of the
plan's 

. In fact, we believe this phrase makes SIPCO's plan even less ambiguous than
Ceridian's plan because SIPCO implicitly reserved the right to make retroactive changes to its plan so long as it
expressly provided that the amendments would apply to already retired employees. SIPCO expressly sent those
employees that already had retired a new summary plan description which contained a new clause. This clause
informed the recipients that SIPCO reserved the right to change or amend the plan. 

Therefore, the
employees in this case have a stronger argument than those who prevailed in Jensen.




                                                      -13-
         In contrast to Jensen's termination of rights clause, nothing in Ceridian's plan documents imply that
Ceridian reserved the right to change the benefits to already disabled employees. To the contrary, Ceridian's plan
language provided assurances that previously disabled employees would continue to receive benefits. The
reservation of rights clause was tempered by the promise: "If the group Long-Term Disability Plan terminates,
and if on the date of such termination you are totally disabled, your Long-Term Disability benefits and your
claims for such benefits will continue as long as you remain totally disabled as defined by the plan."4 This
termination clause is in stark contrast to the termination clause included in the individual health, life, and dental
plans. The 1984 summary plan description of the dental and life insurance plan, and the 1983 summary plan
description of the health plan provided: "If, while you or your dependents are covered under these plans, the plans
terminate or the class of employees of which you are a member has its coverage terminated, then no benefits
(including extended benefits) will be payable to you for any charges, fees, or expenses incurred on or after that
date of termination of the policy or termination of the class."5
         The differences in the wording of the termination clauses in the disability plan and the individual health,
dental, and life insurance plans indicate Ceridian was more interested in providing continuing payment of
insurance premiums to disabled employees than to other employees. The question we are faced with is the
amount of greater protection. Ceridian cites Chiles, and argues that Ceridian did not terminate the plan, but
simply changed the benefits provided by the plan. Therefore, it concludes that




    4
    The 1989 summary plan description did not include, nor contradict, this promise.
Nonetheless, the promise was included in the formal plan document that was in effect
in 1989. We conclude, therefore, that the 1989 Long-Term Disability Plan included
this promise.
     5
      This quoted language is from the 1984 summary plan description for the dental and
life insurance plans. The language for the 1983 health care plan differs slightly, though
it is substantively the same.
                                                       -14-
the termination clause providing for continuation of benefits when the plan is terminated was not triggered. In
Chiles, a class of disabled employees filed suit against their employer, Ceridian, arguing that Ceridian violated
ERISA when Ceridian changed the benefits it paid to the disabled employees. The Tenth Circuit determined that
only termination of the plan would vest disability benefits, rejecting the employees' arguments that the benefits
vested once an employee became 

. The Tenth Circuit held that the long-term disability
plan had indeed terminated. 

Accordingly, whatever benefits the termination clause referred to were
vested under the language of the plan.6

        We are satisfied we should not apply Chiles's reasoning to the case before us. Chiles involved former
employees of Imprimis, a division of Control Data. See 

Unlike the class in Chiles, members of the
class before us were not employees of Control Data's Imprimis Division. See 

n.1. In fact, Chiles
points out that a separate class of employees had been formed for the action before us. See 

indicates that Control Data sold Imprimis to Seagate Technology in 1989. See 

Before the sale, Chiles's class of employees had been deemed disabled and were receiving disability benefits under
a Control Data long-term disability plan. See 

seemed to contain the same provisions as the plan
before us as described above, which provided that the Company would pay the premiums for the life, medical,
and dental insurance programs in which an employee was enrolled before disability began. As part of the sale,
Seagate agreed to administer the Imprimis Division employees' rights according to the terms of the Control Data
Plan. See 

created a new long-term disability plan. See 

of the
administration of the long-term disability plan thus transferred to




        6
        The Tenth Circuit concluded that a genuine issue of material fact existed
concerning what benefits were covered by the termination clause and remanded the
case to the district 

.
                                                      -15-
Seagate, but Control Data continued to administer the health, life, and dental insurance plans. See 

Chiles went on to hold that Control Data's long-term disability plan terminated after the sale of Imprimis
Division, as none of the Control Data disability plan operation and administrative procedures remained in effect.

        Nothing in the record before us indicates that a similar course of transactions occurred with respect to
the plans applicable to the parties in this case.

         We also observe that other circuits have criticized the reasoning upon which Chiles is based. For
example, in evaluating an ERISA plan in Diehl, the Seventh Circuit specifically concluded that it "need not
undertake such interpretive gymnastics" as used in Chiles. 

. In Grain Millers, the Second
Circuit observed that Chiles required that the right to receive lifetime coverage must be found in plan documents
and stated in clear and express 

. Grain Millers, however, emphasized that this was
not the law of the Second Circuit. 

Circuit required only that an employee point to written
language capable of reasonably being interpreted as creating a promise of vested benefits in order to reach a trier
of fact. 

itself pointed out that recent cases from other circuits were not uniform in determining
whether a general reservation of rights clause unambiguously controls a separate promise of benefits upon
retirement. 

-12. It specifically contrasted the difference in the Third Circuit's decision
on this issue as demonstrated in In re 

(a general reservation of rights clause
unambiguously controls a separate promise of benefits upon retirement), with the approach of this circuit as
demonstrated in 

(two general reservation of rights clauses not facially unambiguous).

Though in Chiles the Tenth Circuit followed the In re Unisys approach, Jensen is a recent well-
reasoned




                                                       -16-
opinion of this circuit that we are bound to follow. Therefore, Jensen provides a roadmap for our analysis in the
case before us today.

       The disability plan provides that Ceridian will pay the health, life, and dental premiums for disabled
employees until they are no longer disabled. In support of this promise, the plan assured that if the plan was
terminated, benefits would continue for any employee totally disabled when the plan terminated. Courts have a
duty to interpret different clauses of a contract in a harmonious fashion, giving meaning to all clauses where
possible.

        [A]n elementary rule of contract interpretation is that a contract should be construed so as to
        give effect to all the contract's provisions. Similarly, if two clauses of a contract appear to be
        in conflict, the preferred interpretation is the one that gives a harmonious interpretation to the
        clauses in order to avoid rendering either one nugatory.

Johnson Controls, Inc. v. City of Cedar Rapids, 

, 374 (8th Cir. 1983) (citation and quotation
omitted). When reading plans "[e]ach provision should be read consistently with the others and as part of an
integrated whole. Further, the terms must be construed so as to render none of them nugatory and to avoid
illusory promises." DeGeare v. Alpha Portland Indus., Inc., 

, 816 (8th Cir. 1988), vacated and
remanded, 

(1989).7 Here, if Ceridian faced no limit on its ability to change the level of benefits
paid to disabled employees the coverage could become all




        7
        The Supreme Court's remand of DeGeare was based on its decision in Bruch.
In DeGeare, we held that a plan's fiduciary's interpretation of plan terms was entitled
to deference on 

. Our discussion, however, did not end
there, and we went on to hold that the administrator correctly construed the plan
documents. 

We then applied basic contract interpretation law established
in our circuit. 

Bruch's holding does not affect the contract interpretation
principles discussed in the central part of DeGeare and thus, the basic contract
interpretation principles of DeGeare still apply. See Howe v. Varity Corp., 

, 1109 n.4 (8th Cir. 1990).
                                                      -17-
but nominal and make the promise of lifetime benefits illusory. Thus, the employees would be entitled to few
or no benefits, but the termination clause still would not be applicable to protect the benefits received by those
already disabled at the time of termination. See 

(determining that if a company was
allowed to modify coverage until it became all but nominal, the promise of lifetime benefits would look rather
illusory, and therefore reading the plans to require the company to expend reasonable efforts to keep benefits at
a level commensurate with benefits provided under the original agreement).

        In short, we hold that the reservation of rights clauses at issue here and in Jensen are materially
indistinguishable. The reservation of rights clauses, read with the language promising that Ceridian will pay
insurance benefits until an employee is no longer eligible for the plan, and with the language promising that
Ceridian will continue paying benefits to disabled employees at the time of the plan termination, is ambiguous.


                                                       IV.

        Where a contract is ambiguous, a court may weigh extrinsic evidence. The district court, after concluding
that the termination and amendment clauses defeated the employees' claim for vested premium payments, also
considered the extrinsic evidence. The district court concluded that the extrinsic evidence did not help the
employees, because the only extrinsic evidence before the court indicated Ceridian's intent to reserve its right to
change all aspects of the disability benefit plans.

        Some of the more significant extrinsic evidence offered by the employees included the fact that before
1994 Ceridian had made only prospective changes to the disability benefits provided under the long-term
disability plan. Second, the employees offered the affidavit of Barker, one of the class representatives. Barker
spent his entire career working in the area of employee benefits. He worked for Ceridian as the Manager of its
Corporate Employee Benefits Department from 1968 to 1975. In this




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position Barker was responsible for many aspects of the individual domestic corporate employee benefits,
including the design, administration, communication, and funding of Ceridian's health, life, dental, disability, and
retirement plans. In 1986, Ceridian rehired Barker as its principal consultant for international employee benefits.
At this time he also provided support for Ceridian's domestic personnel relations, primarily in the health, life, and
disability benefit areas. In his affidavit Barker stated that he went on long-term disability status in 1988, relying
on Ceridian's promises, that for as long as he was disabled, he would receive 60% of his wages and 100% of
welfare benefits premiums. Though Barker knew that the benefits could be changed, Barker never believed that
Ceridian could retroactively change its obligation to pay the insurance premiums.

         We observe that the extrinsic evidence presented by the employees is similar to the extrinsic evidence
offered in Jensen. In Jensen, the extrinsic evidence offered at trial included evidence that the company's former
employee relations manager had considered medical benefits to be a vested benefit and that the company
previously had made only prospective changes to retiree medical 

. The evidence offered
by the employees here is more than enough to show that a genuine issue of material fact exists concerning whether
Ceridian could change its long-term disability plan retroactively and refuse to pay the insurance premiums for
the disabled employees.

        Accordingly, we remand to the district court for proceedings consistent with this opinion.

        A true copy.

                 Attest:

             CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.




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