Court Opinion

ID: 9805162
Source: CourtListenerOpinion
Date Created: 2023-08-31 17:39:26.569029+00
Date Added: 2024-06-11T10:38:13.660799
License: Public Domain

WATFORD, Circuit Judge,
concurring:
I agree with my colleagues that the plan administrator didn’t abuse her discretion in denying John Nasi’s pension claim. I write separately to offer an alternative ground for affirmance: Even if Viad agreed to pay Nasi $193,397 annually for the rest of his life, as Nasi contends, it no longer has that obligation because Nasi was significantly overpaid from 1996 to 2008.
In 1995, MCII funded a secular trust on Nasi’s behalf with $595,848. MCII also sent a tax gross-up payment of $498,188 directly to the IRS. After Nasi retired in March 1996, he received a check for $8,292 every month until September 2008, when MCII filed for bankruptcy. The key in this case was how that $8,292 figure was (mis)calculated. MCII started with $16,116, the monthly installment of Nasi’s $193,397 annual pension. It then subtracted Nasi’s monthly tax-qualified pension payment ($1,930) and, because Nasi had already received the value of his secular trust up front, the monthly annuity value of his secular trust payment ($5,894). Nasi agrees that these offsets were proper.
What the calculation above doesn’t account for is the tax payment sent directly to the IRS, a fact on which Viad relied in its denial letter. That Nasi never saw that money is irrelevant — it was nonetheless his. He received a benefit of $498,188, and his monthly pension checks should have been reduced by the monthly annuity value of that tax payment ($4,928) in addition to the monthly annuity value of the amount paid to the secular trust ($5,894).
The most Nasi should have been paid per month was $3,332. That figure reflects the monthly value of his $193,397 *453pension ($16,116) minus his qualified benefit ($1,962, as adjusted in 2004) and the annuity values of his trust payment ($5,894) and tax payment ($4,928). Nasi was therefore overpaid $4,960 per month for twelve and a half years, for a grand total of $744,033 — even before factoring in an appropriate discount rate, which would make that figure grow significantly.
By the time of his actuarially projected demise, in 2022, Nasi should have received a total of $1,039,643, the sum of his $3,332 monthly payments. By October 2008, however, he had already received $1,242,249.
In sum, even if Viad owes Nasi $193,397 per year — and its denial letter states compelling reasons why it doesn’t — Nasi has already received more than the benefit of his bargain.