ERISA – Benefits – Monthly Payments

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7th Circuit Court of Appeals

Case Name: Roger G. Cocker v. Terminal Railroad Association of St. Louis Pension Plan

Case No.: 15-2690

Officials: POSNER, FLAUM, and EASTERBROOK, Circuit Judges

Focus: ERISA – Benefits – Monthly Payments

It was proper for payment to appellant in retirement to be offset by payments already rendered once appellant initially retired.

“Imagine two employees of Union Pacific, each entitled to the same retirement benefit of $2,311.73 a month. Employee 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.”

Reversed and Remanded

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.