we've been sitting with judge lopez from the first circuit and i was about to thank him i'm i realize that we have our own greenaway here on a case that was continued from prior sitting so we'll call that case of plan calculations generally top half plans follow a typical calculation set up highly paid executives are given additional benefits based on compensation including bonuses and other other payments that exceed that i presume it's way yes i would agree we have not pursued that argument i believe that position the position is that provision still it stands and does permit them to change the terms that are you know i'm however we have not push you say it would you tell us exactly how you read b of seven point two point two to include in it the cola yes  way we read that provision there are two phrases in the factor of seven point two point two the first is the basic amount of early retirement benefits but says normal does have or no matter it doesn't in this case i think both the parties believe that that phrase is defined by the supplemental plan itself and section two point seven were in the focus of that definition is the benefit the participant is entitled to and there's no mention of the pension plan it's to the extent of it's the benefit they're entitled to under the pension plan which we believe is the accrued benefit which would include the cola under arrest and other law ok it says entitled to it doesn't say the amount which they were which they actually received which is is that this is the same thing if you will we believe it is and we can look to the her decision from this court where in a similar situation where an offset in that case is an offset or so security so security payments that were paid within a topic context this court found that the words it's title two meant received so that it was only proper to offset the full amount that was received anything less would permit a double recovery for the for because that's what they got presumably under b this says we're going to deduct from a what they received from early retirement from the normal pension plan which in this instance clue did that the color correct exactly or on a that's our position is that to do otherwise you would get even swear the same composition twice and in this case there is no cola for a lump sum payment under the supplemental plan there was no legal obligation to do so point and they're finding there was that a risk is the one requiring the accrued benefit to include the call so i've a couple of questions on this since we're focusing on this two thousand and eight so tell me what's the course of conduct prior to two thousand and eight to support the view that the two thousand and five supplemental plan was clarified rather than them i think the parties agree that there was no change to the language our position was that that language was purely clarifying we don't think it changed anything and to be honest we be fine approaching it with the still one nine hundred ninety nine language i don't understand it didn't change anything then th how does the calculus change because subsequent to this it becomes a supplemental plan minus the cola it wasn't that way before so what do you mean there was no i would disagree that it was that way before but the change was that in two thousand and eight the pension plan was amended to add a cola that didn't exist before so as we describe in our papers and it gets into somewhat co and part of the benefit to which they were entitled to the coal that didn't exist before two thousand and eight when it was added to the pension plan based upon williams and other of us a law that became part of the accrued benefit the benefits we are now told they received th simplistic now you are just giving us the two of my six i mean if you really had on both sides of the equation and the v a number represented by factor a or by factor b was changing in the same keep going with your with your description because it's of interest in the what what changed so that before when you look at factor a and you look to factor b everybody was ok with  t but now you know you put the coals in and be something different about factor a than used to be or must be no no your honor so that's where the misconception but then that  that's what i'm trying to get you to explain to me something what is that what were they get in before that they don't think they're getting now are they actually getting the same note last that it's just the a has never changed there's never been amended the a has been the at the same time added in a so that you know that's the misconception ok it's not pension plan plus something else it's separate calculation under and that takes into consideration from the pension plan amendments sure and that what that did this is serve to increase the pension plan benefits they received which then increased the offset and decreased the payments but the ultimate benefit stayed the same an actuarial there's an additional say oh by the way under williams and since we've amended the plan you're going to get for forty because we're in a hole of forty thousand dollars so they get four forty but now they're arguing that when you calculate looking at article six of the pension plan under b and saying you have to do that calculation which produce a different result your argument is there's no incorporation of article six there's no incorporation of that you read be according to exactly what it says their entitlement under the pension plan i e what they got exactly or under that's what we believe we believe you just use the words of the supplemental plan and that language and the supplemental plans definitions to come to the conclusion of what is the value that's included in office and the offset in factor b it's doesn't need to have a formula for calculating a benefit all you need to know the end of the day is what was what were they paid what did they receive under that pension plan and that's the offset they wanted to be something last just like the plaintiff did in a hurry which otherwise will permit them to receive double payment for the same compensation which is a windfall for them all we're asking is that the were entitled to under the supplemental point your honor i think there goes that the tony per rate of the decision from the district court in that decision you had a situation where there was an actual written plan amendments of a welfare plan there i mean the cola was treated the way it was before and math had to change when they chose lump sums because there was a lump sum added to one plan and not the other it's an actuarial thing so when that math change occurred there was a way that we had to express it in some way you could because of the like kind of you it is work that work like kind anymore you couldn't subtract apples from oranges or dollars from euro's you had to convert them to something else so they were converted to lump sum  s at the end of the day and there was no amendments there was no change and there was no forfeiture of something that you were entitle to because as we have exploited the briefs in it at least have  tell you could argue that they lost a right to retire or medical coverage that they otherwise had here what they want is a right to a cola paid from the supplemental plan and there is no right to that and heine says you cannot create a right that you're not otherwise that total retirement benefit between the two is always the same ok and that's because they have no right to a cold or the so absolutely around because they got the call and they're ending up getting the same amount if it were construed the basic point is that how am i confused i'm not saying anyone in particular is confused or rather i'm trying to say that when you look at the formula seven point two point two you see the term one twelfth the case we believe begins and ends because the torah one twelfth is there now it's monthly well it also says month in the parties agree that's redundant because one twelfth is there but the reason one twelve is there is because all of these benefit calculations  experts times an amount of earnings times perhaps some other factor and that yields an annual pension benefit if you want to make it a monthly pension benefit you just divide it by twelve and the ten years of history but he has he's laid out his case in this briefing and here before us has the assertion that they are they're getting they're getting the same amount of money they're just getting it out of one pot instead of another and amount is and the plaintiffs had a right to take that as either an annuity or a lump and under the plan and under a receipt generally those two different forms of payment have to be actuarially equivalent right and it's be means what they got under the pension is that what that means that doesn't mean that your mother doesn't but means the result of the formula in article six of the pension plan it doesn't say that well because it says the title to which they're entitled from the pension plan and they're entitled then if they got for forty you're saying they got more than that to which they were entitled using my four hundred forty if i might point to the language first your honor it says the equals of the basic amount of normal retirement benefits and that's a capitalized for a permit it just so happens that the part of article six of the pension plan that we point to has that very title in the act but do you agree it's early  i think the fact is that they had enough agent service that the normal early decision goes out the window in this case something that's capital in one document that's not necessarily incorporate the definition of a capitalization another document unless the mathematical answer of what to plug into b is article six of the regular pension plan and that yields a monthly or annual amount you only get to along some by use of another section of the pension plan you only get to a cola by use of another section of the engine plant excuse but i'm not suggesting that the terms of the individual plans are not meaningful but we were on the verge i think of getting you to describe where a logical flaw just tell us where is the logical flaw in the assertion that you got for forty so you don't get to get it at the back end to well which is what i understand them to be saying what's wrong with that argument well they had a right to a pension plan and they could take it either as are new or your lumps on it should not matter to the supplemental player whether someone aleck's to take a lump sum because there are risks involved and take a long visit when you say it shouldn't matter does you get the colon to the pension plan and the well that if the purpose of that a minus b formulation is that is the is to come up with a way of  what you're entitled to and that those numbers still they don't actually or they shouldn't take account of the fact that you're getting to cola in the a section because that's what it sounds like you're saying that yes never mind what's happening over there will affect focus right here on b just look at b the short answer as to why you don't take account of the cola is because seven point two point two doesn't call for you or allow you to take different value i mean monthly is going to be different because you your cost of living is not going to be actuarially decided upfront the way william says you should your cost of living is going to be over time and it's not going to be calculated right up front so it you have to do it bit by bit done well to go back to the question you asked mr graham yes it's confusing to why people including me how can you project what the value of this whole is but actuaries well  call is well because it's going to be over time there might be a cost of living adjustment every year so you don't really know is that the answer or that is not every answer your are yes but yes to be the starting number without a cold because you there was only a call well that was paid out of the pension plan by virtue of your men that because they elected lump sums under the supplemental plan they have no cold war in the supplemental players they have no cola from the supplemental pay o i'm sorry i thought we made that our year for let's resume the five hundred thousand is the top number is that is a ok ok and they got four forty five so under his reading they're entitled to sixty magic thing you put it you put it in the monthly and it comes out so completely different whether you nice this thing in twelve or not you know what is wrong well object in the math you just heard from well again there is no cola that was paid these gentlemen away exactly the same amount from your supplemental plan which under but tony is in direct backdoor violation of the cutback rule because you have taken away the economic benefit of the current in the pension plan which supplementals now there's a whole of the pension plan side but now that lump sum across cola short but now in the supplemental side it's l the cola was fifty cents to the dollar right on top of which right so you get a dollar fifty ok on the pension plan side your argument is on the supplemental side obviously the supplemental might not be equivalent to the whole amount on the pension plan side but it's substantially similar so your clients are saying well wait a minute yeah you know now i have no benefit as a result of the company essentially trying to even think that correct in fact not it was to the penny or rather the letter said we're going to offset the same amount of the cold bump from yourself a little so in my hypothetical it cents on the supplemental plan side so there's a net zero right which means thank you very much for saying i had a right to a cola because you just took it away from me through the vehicle of the supplemental plan you said that you're not getting double payment because it's one then is is wrong in other words if you if the that number on top is five hundred thousand when i say and it's five hundred thousand and let's say for the sake of argument that  a benefit a pension benefit is calculated one and a half percent times a certain amount of time some multiplier for years of service and then that's the annual pension benefit if you divide by two all that's a monthly benefit so what i'm sorry to well but the very use of the term in a factory doesn't use the term monthly means that these are supposed to be annuity of else in the period is very clear that when you want to convert to a lump sum that's an entirely different section of the but the plan when you look at the terms of the plan and it's a standard actuarial practice is it also for the record it's ten years of history of calculations monthly gross a minus monthly pension be equals that benefit me on the plane interpretation i think there is still a cutback lane because it's overt transparent in all the documents that the plans gave with one hand and took away with the other and although there are some superficial differences between the medical plan the toady in the supplemental plan here the basic point is that the law doesn't permit backdoor violations of the recent you can't use a different plan to be the instrument of punishment let's we'll succeed instrument of punishment was zero any finding should it be granted discretion is entitle to have that discretion on or to in the absence of some showing that there's that faith a lack of good faith and fair dealing and i correct about the law t your argument has depended on as the district court said a decision that some point to point to is unambiguous and unambiguous lee in your favor zachariah that would be part of it yes that would be one way to win that cla ok when you say that's part of i mean that's a whole the right because well there's ambiguity and it's on the stupid that the committees got discretion here then unless there's bad faith their view of that has the governess in it well it's goldstein sets up an interesting test because we know that whatever they did there's no difference there's no difference as there would be an adorable rissa case to the point that if you act in america frustrate expectations if you change position for example if you have done it this way for ten years now all of the sudden you change it that is evidence of bad fa the in the in the parlance of the duty of good faith and fear and that's also documented in the district court's decision yeah in the police and finally i would say that comes and the question of whether there's ambiguity here so right well benefits under seven point two point two for all plaintiffs were calculated as monthly payments first and then converted to lump sums so in answer to judgement bells question there is absolutely nothing wrong with  your your present min of this as you got four hundred now they got for forty the all such before forty doesn't matter how you present it because under the law those things have to be actuarially equivalent so when the are performing their magical tests of taking the monthly benefit that is created and converting it to a lump sum they're using the actuarial assumptions to get to the same amount so that perception the plaintiffs are pushing that somehow magically something is wrong with the idea that as a lump sum they had four hundred now got for forty you shouldn't upset the poor forty because that's what receipt is just completely baseless well weren't they they were alerted in the nels correct it's nowhere in fact or b doesn't say article six and the draft of that supplemental plan was pretty clear when he wanted to direct you to the pension plan in at least five places that we have put into the grief when they want t you to go to a section they said go to section two point three title in caps bold it i mean they didn't mess around that's not here what the drafter here wanted you to do is to offset the value of you of the pension plan benefit that they receive the benefit to which they were entitled it has legal significance the legal significance is it's the amount of the crude benefit the accrued benefit comes into relevance for the supplemental plan is in those five places where that the drafter sent you there and said go see article two of the pension plan with title or to get the value of the benefit they were c to offset because as i said at the introduction the whole point of a top plan is to give highly paid executives additional benefits of above and beyond what they can get under a qualified plan and the a factor is giving them that but what you don't want to do and what employers are not required to do is give them more than the amount of benefit they wanted to give them and here all you're doing is you're not changing the amount of the retirement benefit which they were going to get from both plans that amount is the a factor it has never changed so what is that what is the mistake that are making when they argue that the supplemental plan now offset by the whole of means there's a net zero with regard to the cole of because of said of the supplemental because they don't get any more under a there is a net plus for them because they have now gotten the cola under the pension plan plaintiffs want to pretend like they didn't get the call up to the pension plan they got it they received it they all got multiple hundreds of thousands of dollars war under that hole on the pension plan what they want is they want their cake and eat it two hundred supplemental plan through the benefits they are asking for in this case and what we believe the district court made error on are coming from the supplemental that's what the way it was being handled for years that there was of course a feeling when you change the court revealing so that even if there was an ambiguity in seven point two point two the interpretation that your clients gav it couldn't be viewed properly as having been taken in good faith sure i think it goes back to what judge rebel was saying in the letter that we had sense that it didn't change they just want to say it changed they have no basis for saying it changed they want to create  so you don't have to worry about it but what changes is when you have the cola even the monthly amount of the if it's the best it's not that the calculation formula that needs to be in b it's the value so let's assume for that here that the top hat calculation fifty thousand that crazy it is because it would probably be larger than the pension plan amount because that's the whole point is it would be a large house two hundred thousand but i want to work with whatever numbers surprising from that two hundred thousand and amount of money right equal to the amount of money that they're receiving on the pension plan side  is that right yes ok now he is there is there a flaw in that in that presentation is that not what's happening what's exactly what's happening it's exactly which i know have been saying earlier there's something hundred thousand dollar benefit subtracting from that amount right as of today is an amount equal to him out that i would get for a cola on the pension which would be a one ten my correct ok which would then give you a supplemental plan payment of ninety so at the end of the day they're getting ninety plus one ten which is still that you hundred they're out nothing and they're not impacting any and there is no cola right under the supplemental plan plaintiffs want to do this through smoke and mirrors make it look like they're not getting it from the supplemental plan that you're somehow impacting this pension plan payment but that's not true they're getting everything they were supposed to get from the pension plan in fact through the cole amendment they got war which defeats any grief or usury duty claimed under the pension plan there's a loss on this side you have the top half plan which is exempt from all of recess so there is no putback there is no breach producer duty and that's the benefits they say they're allegedly forfeit or the supplemental plan and that is permissible