of the pension he had accrued over fourteen years of service to northern trust well if he had quit that day or the next day would he have lost anything he would not have lost anything as of that day your honor but at risk the heinz case makes clear protects more than just the monetary benefit as of the date of the amendment that it protects the value of the benefit i think it's an immense about how in how general terms you want to talk about this of course if you're alluding to the fact that there's an anti cutback rule there certainly is an anti cutback rule on the other hand there's a line in a recess between benefits that have accrued and future expectations of benefits and there's nothing to my knowledge that prohibits a company that runs a plan to change future expectations so are we really were just trying to decide whether what happened was a cut back of something forbidden or whether it was simply the end of the future expectation and the plan makes clear that this aspect of average compensation effects the benefit earned by service rendered prior to the da that is clear in section two point one tripoli of the plan which says for example in the two thousand and two plan those participants who made the switch from the traditional formula to the original pep benefit formula as of december thirty first two thousand and two the truth isn't it to plan makes two things very clear first even though the credit service under the traditional formula has seized the benefit continues to grow at the rate of future increases in average compensation that is abund clear from the two thousand and two plan it's also clear from the two thousand and three and the two thousand and eight are not me and that's sign of god there's nothing that says a company can't do that i mean it's a nice plan it's a generous provision but compensation is attributable to service provided before the date of the amendment is a matter of promise judge when the plan makes a promise of accrued benefits based on a formula and the participant service in exchange for the benefit defined by that formula the plan cannot change the formula to the detriment of the participant with respect to the benefits already earned and that's exactly what happened here well i mean i do understand that under the new formula the post twenty twelve formula instead of whatever his if his salary increases have been more than one point five percent going forward he would be getting less said back into the computation i guess is average but they're always different words average compensation eligible compensation annual compensation we're not talking about and you're talking about i suppose average we are talking about it right and so had he received only raises of one point five percent per year post two thousand and twelve he'd be in exactly the same position that the comfort the bank if he had not received any races at all he would be worse off than if he'd received what had been more like the typical raise he was getting three to four did you know something like that percent he's not getting as much fed into the formula  the earlier service right in the back as varies but that when i phrase it that way it seems it's very speculative it's an expectation of a future increase it's not something that has already happened it has from their point of view if they were to prevail he has a two part benefit part one from the time that he was hired until the two thousand and twelve amendment which takes advantage of of all the formulas that you're talking about in part two going forward which is not is favorable in your view and we agree that going forward with respect to his future service the plan sponsor can change the formula with respect to the future service but the plan makes clear that they have changed the formula with respect to the service he already provided and that diminishes the value of the benefit on the date of the amendment in the un who complained and second amended complaint in this case we've alleged that mr teufel has historically received more than five point one percent in annual compensation increases and just in the five years ending march thirty one twenty sixteen the average annual compensation increases were three point six four percent northern has told the federal government in its form fifty five hundred filings that participants under sixty five will receive average annual increases of three to nine percent for all of those people but this reduction in the growth of the benefit that they have already earned is a cutback this court has made clear and hickey and and robert and and and a whole line of cases that the fact that growth happens in the future does not preclude it from being considered part of an already accrued benefit and that's exactly what this plan provides it doesn't matter whether the formula is a living pension as in shaw or cola adjustment as in hickey or the plan earnings as in record once the plan makes the promise that you will yes and they could have given him raises of anything and he just wouldn't had a plan after two thousand and twelve correct and that raises a whole host of economic incentives and disincentives it also raises twelve point two of the plan which specifically says that if they terminate the plan both credited service and average compensation will be determined date of the of the germination right there's no similar provision with respect to a plan amendment and that growth is what he's entitled to here and that's what we're climbing that the plan specifically said with respect to the definition of accrued benefits that it will not take into account any future earnings or any future service and it was relates to the service already provided by the sponsor a contract is formed and it cannot be violated under rissa it's a matter of a promise made has to be a promise kept under section two of four g they were they didn't give i don't know who even my computer skills actually may be better than that but if but it's readable when you can if you're patient our position is with respect to the chart that it is not designed to be understood by the average participant which is what section tool for each requires if that were the only problem with a notice we might not be making this complaint i think it is a significant problem with the notice but there are other problems with the notice  example the notice told participants that the two thousand and twelve amendment would not have an impact on their benefits under the traditional formula as of march thirty one thousand and twelve that was false the notice the civically told participants that the two thousand and twelve member would have a worse impact for younger employees that was demonstrably false and the charts in addition to being printed in the way your are noted used the wrong data for comparison and as we've pointed out that the rest of the notices is kind of a confused mess this notice was no let's talking about l i mean i gather there are questions about the social security adjustment and the like it's talking about eligible compensation what's eligible compensation it's an compensation as it's defined by the summary plan descriptions that were distributed to planned participants and its annual compensation if you look at the actual data that's and that's used in the charts and we submitted affidavits to that effect but there are other places where eligible seems to be something different from annual that's right at the end of the notice they do make an equivalency between average compensation and eligible compensation the problem with that in addition of the fact that it's very to the back of the noticed is that the data in their charts don't reflect that difference or that equivalency the data in the charts is based upon eligible compensation and specifically not average compensation but they have this they also say to obtain an estimate of your pension plan benefit go to this place you know it essentially you know click on something access your benefits and just roll through it and is it your position that that would have given an inaccurate number or that that was flawed to we don't know judge because  dismissal that is not in the record we had our attacking the notice and one of things notices telling people is here's how you can get your numbers specifically that's right and that's why i'm asking why is that misleading or inappropriate the reference to the online data tool is not something we're claiming is an accurate i don't know what the online data tools said we have not had discovery on that issue and what is what is inaccurate is the statement that younger people will be worse off there is no mention of the freeze and final offset compensation and the data that they submit to the participants is the wrong data i would like to just mention the age discrimination claim which is largely not challenged by the defendants in their brief but they do they say that you're equating age with numbers of years of service and and  percent that if you're really looking at people who've served for x number of years that's not the same thing as age that's right and that's in a disparate treatment case a disparate impact case if you look at smith versus city of jackson and the by the supreme court hold that a non age related factor is the very premise of an eighth of a disparate impact age discrimination claim here although they make that argument they do not contrast that there was a disparity in age between the traditional participants and the pepper to suppress and it was statistically significant and they do not contest or challenge the fact that this plan amendment had targeted differences in the reduction in benefits and total compensation your honour's very first question to mr de grant that is had mr teufel quit on the day the amendment became effective would his accrued benefit under the plan be reduced it would not and why me why is that the question he's point i think is that a from the formula if he were you know three more years and had gotten three percent per year increase then the the numbers that set into the formula for his benefits up and twelve would have been higher than it than it is under your event is undisputed that had mr teufel worked additional years and the amendment not then put into place he would have earned a higher point that had this plan been terminated there is a provision of the plan section twelve point two which provides that the participants accrued benefits will be determined as of the date of terminations he then went on to say that there is no similar provision for a plan amendment and that's simply not the case section thirteen point one of the two thousand and two plan specifically provides that the plan may be amended so long as it does not reduce the accrued benefit the participants  as of the date of the amendment so the court doesn't need to get into this excess tensional question of whether it's possible for a plan to create an accrued benefit that allows for future earnings because this plan doesn't do that if this court were to take up that question though it's clear from the supreme court's ruling in hindsight and from this court ruling in hickey and as well that the moment to consider whether in a crude benefit has been reduced is that the time of the plan i meant not at some future point but at for you times for the for the case about future employment i mean that would have been impossible to have made that decision the moment  a plan was changed they were already retired and they were suddenly told you can't work in these other jobs that's correct so in hindsight the there was no question about what the accrued benefit consisted of because the plan participants had already retired right here if the if the participants and hines had been saying we have a right to go back to work and earn more credit you would have gotten a different outcome what they were saying is you told us this is the benefit that we had earned you can't make it less valuable by imposing additional conditions on it a good so the so you're drawing a distinction between additional conditions and fiddling around with the formula that's used to to monthly benefits i am not it's your honor and to me that doesn't really work i agree that is not really worth the distinction is between whether the benefit that's being reduced is something that has already been earned by past service or something that will be earned in the future and his argument is it was already earned because you gave me this formula and yes the formula had is one element a number that was going to depend on future events as ice said earlier you know it could have been a lower number could have been the one point five a could have been a higher number sure that would have depended on the economy and a number of other things that you know just the world happens so  why why if it isn't at the formula itself though that takes those numbers what he has the right to that future numbers just like future jobs it's simply more than the anti cu retirement subsidies that's not what's at issue here they cases and the statute are quite clear that what's protected is the accrued benefit at the time that the amendment has is made a future expectation that you'll be able to earn more he's not protected by the outside couple so i was this is the simple difference between heinz in your case then that hines was taking x and subtracting from it and he wants to take x and add to it  being the benefit and times you're taking away something by saying oh and here's this extra list of jobs you can do whereas in his case he wants more based on the future and he wants the right to earn more my style stranger and i think that's the difference so in some of the other cases for example where there's a cost of living adjustment that's a component of the benefit there can be a future increase after the date of the amendment that's part of the benefit that spelled out typically in these plans a colo for instance ye spelled out here the language of the plan and this is a little bit of a tricky thing for a plan draft or a plan draft or has to draft a formula that can be applied at different points in time this concept of an accrued benefit gets used for a lot of different things interests including as mr graham pointed out filing fifty five hundred and calculating how to fund a plan but what this plan provision does this provide that it any time a participant's accrued benefit will be calculated by a particular formula which is based on credit it's a service that has been completed at that point in time to the extent there is any doubt about what that means in the context of an accrued benefit section thirteen point one of the plan awful it's quite murky for one thing and then one of the things that mr grant is focused on i think i'm looking at the right place under the section how these changes impact you  there's the paragraph for those closest to retirement presumably the older people the impact of these changes is projected to be less significant than those further for retirement since most of the final benefit has already been earned  then it talks about this online resource and he says that's just flat out wrong that it's actually much it's a much harsher impact on the people who are closer to retirement because they're losing the benefit to get  a higher base sensually for their benefits so we disagree with his statement that that is flat out wrong and in fact what this statement means that your honor is referring to is that those who are closest to retirement will have the smallest portion of their benefits calculated under the newly amended provision those who are further this from retirement are going to have more of their benefits calculated under the new formulas which are less generous overall than the traditional formula benefit mr trifle himself actually illustrated this point when you elect it in two thousand and two to stay under the traditional formula rather than switching to the path for me about it right then we have these tables with that last column on readable  seems odd that you couldn't have done better with this notice because the point of the notice is really doesn't even matter if mr totals particularly this ticket it's going to be the average participant who's able to follow us so this court might feel slightly more sympathetic toward the changed the base that's going to be used for people the traditional plan by capping it whatever it was in two thousand and twelve plus the one point five percent and then actually there's an additional component which is that going forward mr teufel and the other traditional formula participants arc are accruing benefits under and under the other plan which also has to be explained to the that's why i said it's a plus b situation  one type of plan up to the two thousand and twelve and then so whatever check he gets once he retires is going to be a two part check more or less that's correct your honor and and the obligation to explain all of the impacts across the entire population of participants that falls on the planet ministry or here is a relatively complex task the plan administrator here as the tool for each notice demonstrates tried to explain that in a few different ways first in narrative text this is how it works then by laying out tables with examples we are here on a motion to dismiss so we're confined to the record before the district court the court can tell by looking at this notice that says  scenarios for participants but then to the extent that the participant had a question about the actual impact of this amendment on that participant the plate administrator provided an online tool i'm pretty explicit instructions about how to use it that would allow each participant to calculate their benefit under the amendment and after the amendment in different scenarios that certainly represents a good faith attempt on the part of the plan administrator to convey in a manner that's understandable to to the average participant what they really care about which is the impact on them the notice has to cover the entire population and has to give a lot of different scenarios mr does not allege in his complaint nor has there been any suggestion anywhere in the record that there was anything inaccurate about the estimates that were generated by that rule you know that's interesting so it's not even allegation no it's not alleged in the complaint if the primary allegation in the complain about the notice your honor and it is why the district court i believe dealt with the notice claim the way that it did was but the notice said that your accrued benefit as of the date of the amendment wasn't changed and it was and the court found that that allegation fell once the court so maybe the last thing you can explain for me is the the different ways in which this term eligible compensation seems to be used even within the notice and across the board in the cases on hold and mean that it's not really just annual is it so what's relevant to calculating the current benefit is the average compensation which is actually an average of over all the years of service using five  yes and that's what's used to calculate the benefit eligible compensation is used in the notice in an attempt i believe to use simpler terminology that makes more sense to the average land participant in the my way eligible which sounds like somebody has an idea of what counts and what doesn't more clear than annual which everybody is going to know well if it's that annual compensation which is the defined term that would leave an open question as to whether it's your last year of compensation or what it actually is which is a wise not so hard to say your five best years don't people understand that people may or may not understand your five best years that the task for someone trying to draft a two a four h notice is to attempt to reduce this to its simplest terms and that is always a challenge and frankly always leaves an opening for someone else to come along later and said you could have explained it in a different way the obligation is to draft a no that's that's reasonably calculated to give an appropriate understanding of the effect of the amendment i would also just like to touch would receive the same benefit for the same years of service in the same choices that then there is no violation of the eighty the court each stressing disparate impact of course on older people not just  treatment that is correct to use stress stressing disparate impact and i don't think this court needs to reach the question of whether there is any disparate impact claim that could be brought under the ada because the a p a is actually quite specific about what claims can and cannot be made under the way when it comes to a pension claim and it quite specifically states at section six twenty three one ten one that a p does not violate the way as long as the participants accrued benefit as determined as of any date under the terms of the plan would be equal to or greater than that of a similarity situated younger individual who is or is not a participant is or could be a participant sorry the claim here is not that someone who was ten years younger than mr twenty four with the same employment history would get a different benefit the claim is that there are more people like m who are older we didn't raise we didn't dispute that because again run a motion to dismiss that there are more people who are older but even if that's true there's no violation of thank you under the age discrimination act so that it determines whether the rate of benefit of cruel under the revised formula is age discriminatory and of the act that's not our claim our claim is that the way this amendment targeted older workers reduce their benefits and by reducing their benefits disproportionately affected their total income and their total compensation nothing about the safe harbor addresses that kind of a broader claim of disparate impact age discrimination it wouldn't make sense anyway because they're suggesting that if they can find a hypothetical younger person who is not similarly impacted by the amendment that washes away the age discrimination act that's that is just reading way too much into the safe harbor that is justified with respect to the notice issue i wanted to point out an additional sentence in the notice that specifically addresses this idea that the twenty two of them and that had a more disparate harm for younger participants and this appears on page one sixty three of the separate appendix to this the plan told participants the differences in the lump sum values under the current pension plan formula in terms and the new pension plan formula in terms are greatest for individuals thirty five and younger that's just false that's a false statement and it's false regardless of the accrued benefit claim and it's false regardless of what the online data tool may have said and the online data tool even if it's completely accurate in terms of individual consequences of the amendment cannot displace the statutory obligation and the fiduciary obligation to be straight with the participants in this notice and the last thing i want to point out is this is a twelve b six motion we've had no discovery and on the issue of accrued benefits the defendant's position is that the only thing that the accrued benefit rule to a four g f her for tax is a specific monetary now on a specific date if that were the case your honor he would make no sense ruppert and berger and all of the cases that apply future growth which is what this is a proxy for the past provided