United States Court of Appeals
                           FOR THE EIGHTH CIRCUIT
                                   ___________

                                   No. 01-1970
                                   ___________

Edward N. Hughes and               *
Dorothy K. Hughes,                 *
                                   *
            Appellants,            *
                                   * Appeal from the United States
  vs.                              * District Court for the
                                   * District of Minnesota.
3M Retiree Medical Plan and        *
Minnesota Mining and               *
Manufacturing Company (“3M”),      *
                                   *
            Appellees.             *
                              ___________

                          Submitted: December 12, 2001
                          Filed:     February 28, 2002
                                  ___________

Before WOLLMAN1 and MURPHY, Circuit Judges, and BATTEY,2 District
      Judge.
                         ___________

BATTEY, District Judge.


      1
       The Honorable Roger L. Wollman stepped down as Chief Judge of the United
States Court of Appeals for the Eighth Circuit at the close of business on January 31,
2002. He has been succeeded by the Honorable David R. Hansen.
      2
       The Honorable Richard H. Battey, United States District Judge for the District
of South Dakota, sitting by designation.
       Plaintiffs, retired employees of 3M, appeal the district court’s3 grant of
summary judgment in favor of defendants that allowed 3M to increase premiums for
retired employees’ medical benefits. The Hughes bring their claim under the
Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§
1132(a)(1)(B) and 1132(a)(3). They argue that the district court’s grant of summary
judgment was erroneous because 3M provided vested benefits. Even though 3M
reserved the right to change the level of disability benefits that retired employees
would receive in the future, the Hughes argue that the vesting language survives such
a clause. They further argue that the extrinsic evidence they submitted created a
genuine issue of material fact concerning 3M’s right to change retirement benefits.
Because the summary plan description does not contain vesting language and
unambiguously reserves to 3M the right to change the retirement benefits, we affirm
the district court’s judgment.

                                      FACTS

       Appellants Edward N. Hughes and Dorothy K. Hughes were employed by 3M
until they both retired at age 66 - Ed retiring in 1991 and Dorothy in 1993. The
Hughes, until their retirement, were members of Local 6-75 of Oil, Chemical, Atomic
Workers Union (“OCAW”). Every third year from 1982 to 1997, OCAW and 3M
negotiated the terms of a new collective bargaining agreement, and the resulting
agreement was distributed to the active employees. A document called “Your Benefit
Program” (“Your Benefits booklet”) was attached and was referenced by the
collective bargaining agreement. The 1991 to 1994 collective bargaining agreement
was in effect at the time the Hughes retired. Post-retirement medical benefits for
already retired employees were never negotiated by the parties.




      3
      The Honorable David S. Doty, United States District Judge for the District of
Minnesota.
                                         -2-
       Prior to 1998, 3M provided retiree medical benefits in one of two ways,
depending upon the retiree’s age. If a retiree was age 65 or older and thus was
eligible for Medicare, 3M issued benefits under its Medicare Supplement Plan (“Med-
Supp Plan”). If a retiree retired before age 65, the retiree received the same medical
benefits as an active employee. Once the retiree turned 65 years of age, however, he
or she was switched to the Med-Supp Plan. The retiree was provided with a Med-
Supp Plan booklet after retirement.

      Edward and Dorothy Hughes both retired at age 65, thus receiving medical
benefits under the Med-Supp Plan. In 1998, 3M implemented a revised retiree
medical plan, which resulted in additional cost-sharing by retirees.

       The Med-Supp Plan in effect at the Hughes’ retirement included a reservation
of rights clause, which stated “[t]he Company fully intends to continue this Plan
indefinitely, but reserves the right to change or discontinue it if necessary.” It also
states that coverage will stop “if 3M discontinues the Plan.” 3M contends that the
Med-Supp Plan booklet governs the dispute as the relevant summary plan description
whose dissemination is mandated by ERISA. The Hughes point to no vesting
language in the Med-Supp Plan.

       In contrast, the Hughes contend that the 1991 Your Benefits booklet is the
relevant summary plan description under ERISA. This booklet was issued to every
active employee and contains a half-page section which states the following:

      Post-Retirement Medical Benefits
             If you retire with 15 years of pension service regardless of when
      you were hired, you and your spouse will receive medical benefits for
      your lifetime at company expense.

       The section also included a statement that “[b]ooklets describing post-
retirement medical benefits will be given to you when you retire.” The Your Benefits

                                          -3-
booklet also contained a reservation of rights clause, stating “[t]he company hopes
and expects to continue these plans indefinitely, but reserves the right to amend or
discontinue them, subject to collective bargaining as required.”

                                   DISCUSSION

       We review de novo a grant of summary judgment. Barker v. Ceridian Corp.,

, 632 (8th Cir. 1997). 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). All reasonable inferences of fact from the record are construed in the light
most favorable to the party opposing summary judgment. See Schrader v. Royal
Caribbean Cruise Line, Inc., 

, 1013 (8th Cir. 1991). In the de novo
review of an ERISA plan, we interpret the terms of the plan by “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 to mean.”
Chiles v. Ceridian Corp., 

, 1511 (10th Cir. 1996).

       ERISA requires that employee benefit plans be established by a written
instrument. See 29 U.S.C. § 1102(a)(1). Summary plan descriptions are considered
part of the ERISA plan document. See Jensen v. SIPCO, Inc., 

, 949 (8th
Cir. 1994). An important objective of ERISA was to mandate disclosure to
employees. See 

This being so, when conflict is apparent between
provisions of a formal plan and provisions of a summary plan, the summary plan
description prevails. 

employment benefits as either welfare benefits or pension
benefits. See 29 U.S.C. § 1002(1)-(2). The parties agree that the plan in dispute in
this case is a welfare benefit plan. While pension plans are subject to mandatory
vesting requirements, welfare plans are not. See 29 U.S.C. § 1053; Curtiss-Wright

                                          -4-
Corp. v. Schoonejongen, 

, 78 (1995). An employer offering welfare
benefits may unilaterally modify or terminate benefits at the employer’s discretion,
so long as the employer has not contracted an agreement to the contrary. Howe v.
Varity Corp., 

, 1109 (8th Cir. 1990). A welfare benefit may vest if a
promise to provide vested benefits is “incorporated, in some fashion, into the formal
written ERISA plan.” 

. Plaintiffs have the burden of proof as
to whether vesting language exists in order to confer a vested right to employee
welfare benefits. Anderson v. Alpha Portland Indus., Inc., 

, 1516-17
(8th Cir. 1998), cert. denied, 

(1989).

       Accordingly, our inquiry begins with the written plan documents. We look to
the law of trusts when interpreting ERISA plan documents. 

.
“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.’” Firestone Tire & Rubber Co. v. Bruch, 

, 112 (1989),
quoting Restatement (Second) of Trust § 4 cmt. d (1959). Other evidence is
admissible if the language of the plan provision at issue 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 . . . . The 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.

George G. Bogart, The Law of Trusts & Trustees, § 182 (rev. 2d ed. 1979 & Supp.
1993) (footnotes omitted). See also 

.


                                         -5-
       The Hughes’ position is that the Your Benefits booklet is the relevant summary
plan description. This booklet was disseminated with the 1991 collective bargaining
agreement to all active employees. While it served as the relevant summary plan
description as to medical benefits for active employees and retirees under the age of
65, it clearly referenced the reader to another booklet to gain information about
retirement benefits for those 65 or over.

       Under ERISA, a summary plan description “shall be sufficiently
comprehensive to apprise the plan’s participants and beneficiaries of their rights and
obligations under the plan.” 29 C.F.R. § 2520.102-2(a). The contents of a summary
plan description must “describe the plan’s provisions relating to eligibility to
participate in the plan” and a “description or summary of the benefits.” 20 C.F.R. §
2520.102-2(j) and (j)(2). Further, for employee welfare benefit plans that are group
health plans, a summary plan description must include a description of the following:

      any cost-sharing provisions, including premiums, deductibles,
      coinsurance, and copayment amounts for which the participant or
      beneficiary will be responsible; any annual or lifetime caps or other
      limits on benefits under the plan; the extent to which preventive services
      are covered under the plan; whether, and under what circumstances,
      existing and new drugs are covered under the plan; whether, and under
      what circumstances, coverage is provided for medical tests, devices and
      procedures; provisions governing the use of network providers, the
      composition of the provider network, and whether, and under what
      circumstances, coverage is provided for out-of-network services; any
      conditions or limits on the selection of primary care providers or
      providers of specialty medical care; any conditions or limits applicable
      to obtaining emergency medical care; and any provisions requiring
      preauthorizations or utilization review as a condition to obtaining a
      benefit or service under the plan.

29 C.F.R. § 2520.102-3(j)(3). ERISA further requires summary plan descriptions to
include “a statement clearly identifying circumstances which may result in

                                         -6-
disqualification, ineligibility, or denial, loss, forfeiture, suspension, offset, reduction,
or recovery . . . of any benefits that a participant or beneficiary might otherwise
reasonably expect the plan to provide on the basis of the description of benefits. . . .”
29 C.F.R. § 2520.102-3(k)(l).

      The 73-page Your Benefits booklet addressed retiree benefits with a short half-
page description stating in full the following:

       Post-Retirement Medical Benefits
       If you retire with 15 years of pension service regardless of when you
       were hired, you and your spouse will receive medical benefits for your
       lifetime at company expense.

       If you retire with less than 15 years of 3M pension service, you and your
       spouse will receive medical benefits at company expense for a time
       equal to the lesser of your 3M pension service, or your lifetime. After
       that time, you or your spouse may continue benefits for life by paying
       the required rate.

       If you retire before age 65, you and your spouse will be covered by the
       3M Medical Plan for active employees at your location. Your eligible
       children will be covered by this 3M Medical Plan as long as either you
       or your spouse has coverage under that plan. When you and your spouse
       reach age 65, each of you will be covered by the Medicare Supplement
       plan, which provides up to $10,000 in lifetime benefits.

       Booklets describing your post-retirement medical benefits will be given
       to you when you retire.

       If you die after retirement from 3M while the company is paying for
       medical benefits, your eligible survivors will have benefits continued for
       up to one year at 3M’s expense. After that time, they may continue the
       benefits by paying the required rate.




                                            -7-
      If you die after retirement from 3M while you are paying for medical
      benefits, your eligible survivors will be able to continue their coverage
      by paying the required rate.

       This small section of the Your Benefits booklet does not comport with the
requirements of summary plan description content as found in 29 C.F.R. § 2520.102-
3(j) and (k). Furthermore, 3M did not intend for the Your Benefit booklet to be a
summary plan description of retiree benefits for those over 65 years of age. The Med-
Supp booklet states in its introduction that “[t]he information in this booklet is called
a summary plan description. It describes the 3M Medicare Supplement Plan that is
effective on January 1, 1991, and includes all amendments or changes made to the
plan up to that date. This booklet is the official plan document for the 3M Medicare
Supplement Plan.” The Med-Supp booklet goes on to describe plan eligibility, what
benefits are paid, what is covered under the plan, how coverage is limited, what is
not covered, and how benefits are paid.

       We therefore hold that the Med-Supp booklet is the summary plan description
in this case. The Med-Supp booklet is “sufficiently comprehensive to apprise the
plan’s participants and beneficiaries of their rights and obligations under the plan.”
See 29 C.F.R. § 2520.102-2(a). The Med-Supp booklet meets the content
requirements of ERISA. In addition, the Med-Supp booklet comports with ERISA’s
obligation-to-furnish provision, in that 3M disseminated the booklet to the Hughes
within 90 days of their retirement. See 29 C.F.R. § 2520.104b-2(a)(1). While the
Med-Supp booklet is in full compliance with ERISA, the Your Benefit booklet falls
far short.

      The Hughes have pointed to no vesting language in the Med-Supp booklet, and
the Court’s own perusal has found none. Under 29 U.S.C. § 1022(b), a welfare plan
summary plan description is not required to disclose that plan benefits are not vested.
See 

. A welfare plan summary plan description is only required
to specify those circumstances in which a plan beneficiary is not entitled to benefits

                                           -8-
otherwise provided by the terms of the plan. 29 U.S.C. § 1022(b), See 

; Wise v. El Paso Natural Gas Co., 

, 935 (5th Cir. 1993)
(“Section 1022(b) relates to an individual employee’s eligibility under then existing,
current terms of the Plan and not to the possibility that those terms might later be
changed, as ERISA undeniably permits.”) cert. denied, 

(1993). In
addition, the Department of Labor, which enforces and interprets ERISA, has not
promulgated regulations requiring that a welfare plan summary plan description
specifically disclose that participant benefits are not vested. See 29 C.F.R. §§
2520.102-1 to -4, .104b-1 to -4.

       The Med-Supp booklet’s reservation of rights clause does not, in and of itself,
suggest an intent to vest retiree benefits. At the very end of the booklet, under
“Future of the Plan,” it states that “[t]he Company fully intends to continue this Plan
indefinitely, but reserves the right to change or discontinue it if necessary. Such
action would be taken only after the most careful consideration.” It is plain and
unambiguous that the word “intends” does not indicate finality. To hold otherwise
would render the words “reserves the right to change or discontinue it if necessary”
meaningless. The Med-Supp booklet, devoid of vesting language, explicitly reserves
the right to modify the retiree medical benefit plan at any time. The plaintiffs have
not met the burden of proving vesting language, thus we affirm the trial court’s
summary judgment in favor of 3M.

       The trial court considered extrinsic evidence in its summary judgment decision.
Since this Court finds the ERISA document language unambiguous, we examine no
extrinsic evidence. We hold that vesting language arguably exists in the Your
Benefits booklet, but the Your Benefits booklet is not the relevant summary plan
description for retirees 65 years of age or older. We hold that the appropriate




                                          -9-
summary plan description is the Med-Supp booklet, which exists without vesting
language and with a reservation of rights provision.

      Accordingly, we affirm the judgment of the district court.

      A true copy.

            Attest:

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




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