Court Opinion

ID: 9494407
Source: CourtListenerOpinion
Date Created: 2023-08-05 15:37:18.552202+00
Date Added: 2024-06-11T17:56:23.933592
License: Public Domain

PAEZ, Circuit Judge,
dissenting:
Carl Michael claims that an amendment to the Riverside Cement Company Pension Plan “decreased” his “accrued benefit” and therefore violated ERISA § 204(g), 29 U.S.C. § 1054(g). The majority agrees, concluding that (1) a component of Michael’s “accrued benefit” under the unamended plan was the promise that, if Michael returned to work after his first retirement, there would be no offset, or deduction, for benefits already received and (2) the offset introduced in the amended plan-the actuarial equivalent of the benefits he received during his first retirement-decreased that accrued benefit. The issue Michael raises is a complicated one-one that does not lend itself to an easy answer. I cannot agree, however, with the majority’s application of § 204(g) in the context of this case, and therefore I respectfully dissent.
One fundamental proposition in particular disposes of Michael’s § 204(g) claim. As the majority acknowledges, “Michael was better off after the amendment than he would have been without it.” Slip Op. at 13365. That is, comparing the periodic benefit Michael would have received had the plan not been amended in 1991 to the benefit Michael received under the plan as amended in 1991, the benefit calculated under the amended plan was more generous. As I interpret § 204(g), an amendment that, taken as a whole, leaves a plan participant no worse off under the amended plan than he would have been under the unamended plan cannot be characterized as a “decrease” in the participant’s accrued benefit.
In reaching this conclusion, I readily agree with the majority that all “features of the benefit formula” that may enhance a plan participant’s benefit, including plan provisions such as the “no-offset” rule here, must be considered in determining a plan participant’s “accrued benefit” under the pre-amendment plan. See Slip Op. at 13369 (citing Shaw v. Int’l Ass’n of Machinists & Aerospace Workers Pension Plan, 750 F.2d 1458, 1463-64 (9th Cir.1985)). And, a fortiori, I agree that an amendment that introduced an offset for the first time could result in an impermissible decrease in accrued benefits. But the elimination of one favorable component of a pre-amendment benefit formula-such as the “no offset” rule at issue in this case-will not necessarily yield an impermissible decrease in the participant’s accrued benefit. Rather, in my view, the product of the pre-amendment benefit formula as a whole is the protected “accrued benefit.” And if, for a particular participant, the upside of the post-amendment benefit formula outweighs or equals the downside (as compared to the pre-amendment formula), then such an amendment would not constitute a decrease in the participant’s accrued benefit.
This interpretation of § 204(g) is in accord with the relevant legislative history. See Retirement Equity Act of 198J, S.Rep. *1030No. 98-575, at 28-29, 1984 U.S.C.C.A.N. 2547, 2574-75 (discussing circumstances under which an amendment to a plan’s benefit formula for early retirees would violate § 204(g), and suggesting, inter alia, that, if the benefit calculated under the amended formula is no worse than the benefit calculated under the unamended formula, there is no violation). It also has the advantage of permitting plan sponsors the flexibility to reexamine existing plans and adopt a new benefit formula that benefits (or at least does not harm) all participants.
In short, although the amendment at issue may not have enhanced Michael’s second periodic retirement benefit as much as it enhanced all the other plan participants’ benefits, he was better off with the amendment than he would have been had Riverside Cement not amended the plan. Under these circumstances, I am unable to conclude that there has been a violation of § 204(g). I would affirm the judgment of the district court.