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Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 

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In the 

United States Court of Appeals 

For the Seventh Circuit ____________________ 

No. 15-2690 

ROGER G. COCKER, 

Plaintiff-Appellee, 

v.

TERMINAL RAILROAD ASSOCIATION OF ST. LOUIS PENSION

 PLAN FOR NONSCHEDULE EMPLOYEES, 

Defendant-Appellant. 

____________________ 

Appeal from the United States District Court for the 

Southern District of Illinois. 

No. 12 C 1239 — David R. Herndon, Judge. 

____________________ 

ARGUED FEBRUARY 26, 2016 — DECIDED MARCH 16, 2016 

____________________ 

Before POSNER, FLAUM, and EASTERBROOK, Circuit Judges. 

POSNER, Circuit Judge. The plaintiff is a participant in a retirement plan (we’ll call it the Terminal Plan) governed by 

ERISA; the defendant is the plan. The plan document provides that “the retirement income benefit payable under this 

Plan shall be offset by the amount of retirement income payable under any other defined benefit plan ... to the extent 

that the benefit under such other plan or plans is based on 

Case: 15-2690 Document: 46 Filed: 03/16/2016 Pages: 5
2 No. 15-2690 

Benefit Service taken into account in determining benefits 

under this Plan.” The Terminal Plan based its calculation of 

the plaintiff’s plan benefits on his total years of work, including the years he’d spent working for Union Pacific Railroad. 

So it made sense for the plan to subtract from the plaintiff’s 

benefits under the Terminal Plan any benefits that Union Pacific had already given him for his years of working for that 

company. 

The plan provides that if “the benefit under such another 

plan is paid in a form other than the form of payment under 

this Plan, including without limitation a single lump sum 

cash payment made prior to retirement, the amount of such 

offset shall be the dollar amount per month of the benefit 

that would have been payable under such other plan in the 

form of a Single Life Annuity commencing on the Participant’s Normal Retirement Date” (emphasis added). The appeal revolves around the meaning of “payable” in the plan 

document. 

The plaintiff had taken early retirement from Union Pacific in 2006. His normal retirement date would have been in 

2019, and had he waited until then to retire he would have 

received a retirement benefit of $2,311.73 a month. Instead 

he chose to begin receiving his benefits in 2009, in the form 

of a monthly benefit of $1,022.94. The two dollar figures are 

actuarially identical, in the sense that the present value of 

the two streams of money is the same because the smaller 

monthly benefit is received for 111 months longer than the 

larger one. 

After retiring from Union Pacific the plaintiff went to 

work for Terminal Railroad and became a participant in that 

company’s retirement plan, the plan at issue in this case. 

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No. 15-2690 3 

When in 2010 he retired from Terminal Railroad, the Terminal Plan’s administrator calculated the monthly benefit 

owed him for his combined years of service to Terminal and 

Union Pacific to be $3,725.02, from which the Terminal Plan 

would deduct the monthly benefits payable under the Union 

Pacific Plan. The question is whether the amount to be deducted each month should be $2,311.73 or $1,022.94. The 

plaintiff argued to the plan administrator for the smaller deduction; the administrator rejected the argument. So the 

plaintiff sued the Terminal Plan under 29 U.S.C. 

§ 1132(a)(1)(B). He won in the district court, precipitating the 

Plan’s appeal to us. 

The plan administrator was right. The actuarial equivalence that we noted is the key to this conclusion. The monthly offset required by Terminal’s plan is the amount payable 

under the prior employer’s plan. $2,311.73 was the maximum amount payable to the plaintiff per month under the 

Union Pacific Plan but he lost nothing by choosing to receive 

only $1,022.94, because as we said the expected value of a 

stream of monthly receipts of that amount was equal to the 

expected value of a stream of monthly receipts of $2,311.73 

received for many fewer months. Allowing him to deduct 

only $1,022.94 would have given him a larger Terminal pension and thus paradoxically have made him better off than if 

he’d received his Union Pacific pension in larger monthly 

payments for a shorter period, the paradox residing in the 

fact that the value of his Union Pacific pension was independent of the amount of his monthly benefits, owing to the 

relation between that amount and the number of months. 

Imagine two employees of Union Pacific, each entitled to 

the same retirement benefit of $2,311.73 a month. Employee 

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4 No. 15-2690 

A chooses that monthly benefit to begin at his normal retirement age, while Employee B chooses instead the actuarially equivalent benefits stream of $1,022.94 a month to begin 

now and thus continue for a longer period. Suppose A and B 

retire from Union Pacific the same day, go to work for Terminal Railroad the same day, are paid the same salary, retire 

from Terminal the same day, and were it not for the deduction of their Union Pacific benefits would be entitled by the 

Terminal Plan to the same monthly benefit of $4000. The 

plaintiff’s position, echoed by the district court, is that A 

would be entitled to a monthly retirement benefit from Terminal’s plan of $1,688.27 ($4000 minus $2,311.73), while B 

would be entitled to $2,977.06 ($4000 minus $1,022.94). That 

is senseless given the above assumptions about their work 

history, and is not required by the plan document. The plan 

administrator permissibly interpreted “payable” to require 

that the plan’s benefits be offset by the total value of the 

benefits received by the employee under a different plan; 

otherwise the plan would be conferring a windfall on an 

employee who could vary the monthly payments that he received under that other plan. 

We are reinforced in this conclusion by language quoted 

earlier in our opinion (if “the benefit under such another 

plan is paid in a form other than the form of payment under 

this Plan, ... the amount of such offset shall be the dollar 

amount per month of the benefit that would have been payable

under such other plan in the form of a Single Life Annuity 

commencing on the Participant’s Normal Retirement Date”) 

(emphasis added), and by a recent decision of the Eighth 

Circuit in a virtually identical case, reaching the same result 

as we do today. Ingram v. Terminal Railroad Association of St. 

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No. 15-2690 5 

Louis Pension Plan for Nonschedule Employees, 812 F.3d 628, 

635 (8th Cir. 2016). 

We are mindful of the plaintiff’s further argument that 

the plan administrator had a conflict of interest. But that is 

irrelevant, as we believe not only that the plan administrator 

adopted a permissible interpretation of the plan document 

but also that his interpretation was correct. 

The judgment of the district court is reversed with instructions to dismiss the suit with prejudice. 

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