Opinion ID: 203079
Heading Depth: 2
Heading Rank: 2

Heading: Improper Cutback of Already Accrued Benefit?

Text: Except in certain limited situations not presented here, ERISA prohibits an employer from reducing a plan participant's already accrued benefit by amending the plan. See ERISA § 204(g)(1); 29 U.S.C. § 1054(g)(1) (The accrued benefit of a participant under a plan may not be decreased by an amendment of the plan.). This prohibition applies to both the participant's basic accrued benefit and to any early retirement benefit or retirement-type subsidy. ERISA § 204(g)(2)(A); 29 U.S.C. § 1054(g)(2)(A). Having carefully reviewed the lengthy record in this case, we conclude that the district court correctly determined that the plan administrator did not abuse its discretion in determining that Gillis's already accrued early retirement benefit was not improperly cut back. As the district court noted, Gillis would like to have his Transition Benefit calculated to include both the amount accrued under his previous GSX pension, which indisputably included his early retirement benefit, plus the early retirement subsidy granted by the Transition Benefit. This would plainly amount to a double-counting of the early retirement subsidy. Gillis is not entitled to such a double-counting under the terms of the pension plan. In addition, he was clearly informed, in writing, that the Transition Benefit was adopted to address the unusual situation of former GSX employees who had not yet accrued the early retirement subsidy while employed by GSX, because they had not yet reached the age of 55. Gillis was not part of this group, as he had already accrued his early retirement benefit. Therefore, while the plan administrator was correct to provide a calculation of Gillis's hypothetical payout under the Transition Benefit, because he technically qualified for it, it was not an abuse of discretion for the plan administrator to calculate that hypothetical payout so as to avoid a double-counting windfall that would have given Gillis two early retirement subsidies. Indeed, such a calculation is in keeping with the stated purpose of the Transition Benefit, and with SPX's written disclosure to Gillis. Because we conclude that Gillis's already accrued early retirement subsidy was not improperly cut back, we necessarily also reject his claim that any improper cutback was the result of age discrimination in violation of ERISA § 204(b)(1)(G).