Cottillion v. United Ref. Co

Cottillion worked at United from 1960 until 1989; his benefits had vested under “the 1980 Plan.” Cottillion, then age 54, was among “terminated vested participants” (TVPs), distinct from Early Retirees, who retired at an age older than 59½ or 60, but younger than 65. United informed Cottillion that he could elect to have his monthly retirement benefit begin after October, 1995 (age 60), and that his monthly benefit would be $573.70 at age 60. The letter did not state that the amount depended on whether he elected to receive it at age 60 or later. In 2002, United amended the plan, to comply with Employee Retirement Income Security Act amendments, and receive favorable tax treatment. Later Plans included language, absent from the 1980 and 1987 Plans, stating that the benefits of TVPs who receive pensions before age 65 would be “actuarially reduced to reflect the earlier starting date.” In 2005, actuaries informed the plan that United had erroneously paid pensions that were not “actuarially reduced” to TVPs vested under the 1980 and 1987 Plans. Because deviations from the terms of ERISA-governed plans can jeopardize favorable tax treatment, United sought recoupment under the IRS’s voluntary correction program. Cottillion’s pension was eliminated, and he was told he should pay the Plan $14,475. The district court granted class certification and held that United’s actions violated ERISA's anti-cutback rule, 29 U.S.C. 1054(g). The Third Circuit affirmed. View "Cottillion v. United Ref. Co" on Justia Law