Opinion ID: 790201
Heading Depth: 3
Heading Rank: 1

Heading: The Retirement Plan.

Text: 4 Established in 1965, the AETNA retirement plan (AETNA plan), predecessor to the American Bancorporation Retirement Plan challenged in this case, was a contributory defined benefit plan, meaning that it provided pension benefits as defined by a formula set forth in the retirement plan. The AETNA plan also contained an employee contribution provision, which mandated that participants contribute toward funding their benefits, with the balance of the funding and the risk of investment losses falling on the employer. Under this type of plan participants have a right to a certain level of accrued benefits, but no right to the assets of the plan. 5 In March and December of 1986, the AETNA Plan underwent a series of important amendments. These amendments involved the adoption of a plan developed by State Mutual Life Insurance Company, and created the incarnation of the retirement plan currently before this court (the Plan). First, this series of amendments eliminated the employee contribution provision of the AETNA Plan. Additionally, the March 1986 amendments 1 altered the retirement compensation scheme such that employees received a flat percentage pension equal to 32% of their average salary for the last five years of their employment. However, and critical to the issues in this case, both company documents and executive statements belie a flat 32% compensation program. A summary plan description (SPD) entitled Your Retirement Plan, dated August 1986, described the benefits as 20% of a participant's monthly earnings plus an amount equal to the amount of contributions made by any participants who were active in the plan before a specific date (20 + ). J.A. 321. A similar interpretation was expressed when an executive committee of the Board of Directors of Wheeling National Bank met to discuss the retirement plan. At that meeting, as described by the district court, the committee noted: that the original proposal called for a non-contributory plan with a retirement benefit of 32% of base salary. However, the Committee further noted that what had been installed was a non-contributory plan which would provide a benefit of 20% of annual salary. The Committee explained that employees who were participants in the Aetna plan would receive 20% plus their contributions to the Aetna plan with accrued interest. The combined benefits to participants of the Aetna plan would be approximately 32% of the annual salary at retirement date for those employees. 6 Id. at 797-98. 7 The AETNA Plan was further amended in December of 1986. Under these amendments, employees received a flat percentage pension equal to 20% of their average salary for the last five years of their employment. 2 The American Bancorporation Retirement Plan 3 was further amended in 1992, such that all benefit accruals ended on December 31, 1992. 8