United States District Court, S.D. Illinois
MEMORANDUM and ORDER
DAVID R. HERNDON, District Judge.
I. Introduction and Background
Now before the Court are cross motions for summary judgment. Both parties maintain that they are entitled to summary judgment on plaintiff's ERISA cause of action. Defendants argue that Section 5.5 of the Terminal Railroad Association of St. Louis Pension Plan ("the Pension Plan") should be read to mean payable at the participants' Normal Retirement Date, meaning that plaintiff's gross benefit should be reduced by the amount that was payable to him under the Union Pacific Pension Plan at his normal retirement age ($2, 311.73). Plaintiff counters that the term payable refers to the benefit the participant is actually receiving, either his reduced early retirement benefit or his unreduced benefit at Normal Retirement Age as the case may be, meaning that the offset should be the amount actually paid to him as an early retirement benefit under the Union Pacific Pension Plan ($1, 022.94). Based upon the record and the applicable case law, the Court GRANTS plaintiff's motion for summary judgment and DENIES defendant's motion for summary judgment.
On December 12, 2012, Roger Cocker sued the Terminal Railroad Association of St. Louis Pension Plan for Nonschedule Employees under Section 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132(a)(1)(B) to recover benefits under the terms of the Pension Plan (Doc. 2). On January 22, 2013, Cocker filed an amended complaint (Doc. 13). On May 31, 2014, the Court granted a joint motion to stay this case awaiting a decision in a similar case, Ingram v. Terminal Railroad Association of St. Louis Pension Plan for Nonschedule Employees, Case No. 4:11-cv-01327-HEA, pending in the District Court for the Eastern District of Missouri (Doc. 26). On November 5, 2104, the Court granted Cocker's motion to lift the stay finding that a ruling on the merits based on Seventh Circuit case law was warranted (Doc. 40). Thereafter, the parties filed these cross motions for summary judgment. As the motions are ripe, the Court turns to address the merits.
From December 1, 2006 until January 31, 2010, Cocker was employed by Terminal Railroad Association of St. Louis ("Terminal Railroad"). While employed at Terminal Railroad, Cocker was a participant in the Pension Plan. Prior to his employment with Terminal Railroad, Cocker was employed by the Union Pacific Railroad ("Union Pacific") and its predecessor railroads and had accumulated 34 years and 10 months of Benefit Service under the Pension Plan for Salaried Employees of Union Pacific Corporation ("Union Pacific Plan").
On December 1, 2009, Cocker, having met the eligibility rules for early retirement under the Union Pacific Plan, elected to receive early retirement benefits from the Union Pacific Plan in the form of a single life annuity. Cocker received $1, 022.94 a month. At this time, Cocker was 55 years old. If Cocker had delayed his retirement from the Union Pacific Plan to normal retirement age, his pension from the Union Pacific Plan would have been $2, 311.73 per month. The difference between the normal retirement benefits Cocker could have received if he had delayed his Union Pacific Plan retirement to normal retirement age, and the actual benefits he received from the Union Pacific Plan be electing early retirement is $1, 288.79 per month which is the disputed excess offset.
Section 5.1(a) of the Pension Plan document provides that a participant's normal retirement benefit is calculated using the following formula:
(a) One and one-half percent (1.5%) of the Average Monthly Earnings of the Participant, multiplied by the number of years of Benefit Service of the Participant.
Section 3.6 of the Pension Plan document provides that Benefit Service includes full time service with other railroads and states:
Benefit Service shall also include all full time service with any other railroad company, terminal or station company, joint facility, railroad association, railroad or transportation bureau; or any transportation agency of the United States Government that preceded participation in this Plan (but see offset provisions in Section 5.5).
In calculating Cocker's retirement benefits from the Pension Plan, Cocker's service under the Pension Plan and his service with the Union Pacific and its predecessor railroads were combined, and totaled 38 years of Benefit Service. Section 5.5(b) of the Plan defines the "offset" referred to in Section 3.6 of the Pension Plan document and provides in part:
"Section 5.5 Benefit Offset. Notwithstanding anything to the contrary in the Plan:
(b)The retirement income benefit payable under this Plan shall be offset by the amount of retirement income payable under any other defined benefit plan maintained by any other Company or agency that is not a member of the Controlled group that is qualified under Section 401 of the Code to the extent that the benefit under such plan or plans ...