In Savini v. Washington Safety Management Solutions, LLC, No. 11-1206 (4th Cir. 2012) (Unpublished Opinion), the plaintiff, Noorali Savini (“Savini”), brought suit under ERISA, claiming that the termination of an early retirement pension supplement by defendant, Washington Safety Management Solutions, LLC (“WSMS”), violated ERISA’s anti-cutback provisions. The district court granted summary judgment to WSMS, and Savini appeals.
The retirement plan offered by WSMS (the “Plan”) had stated that “Accrued Benefit” means the normal retirement Pension computed under Section 4.01(b), less the WSRC Plan offset as described in Section 4.13, plus any applicable supplements as described in Section 4.12. On December 28, 2004, the Plan’s benefits committee amended the Plan to eliminate Section 4.12(a), which granted a $700 monthly benefit to Plan members electing to take early retirement on or after January 1, 2005. This amendment was not communicated to participants for nearly 7 months. Savini retired from WSMS on or about April 30, 2005, believing that he would be entitled to the $700 per month supplement. On June 8, 2006, Savini received a letter from WSMS stating that he had incorrectly received the $700 monthly benefit for thirteen months and requesting reimbursement of $9,100. Eventually, this suit ensued.
In analyzing the case, the Fourth Circuit Court of Appeals (the “Court”) said that Savini alleges that the committee’s deletion of Section 4.12(a) from the Plan violated ERISA’s anti-cutback requirements, so that the amended Plan’s elimination of the $700 early retirement benefit should not be enforceable against him. The issue here is whether the $700 benefit was included in the “accrued benefit” as defined by ERISA and the Plan. ERISA’s anti-cutback rule provides that the accrued benefit of a participant under a plan may not be decreased by an amendment of the plan (29 U.S.C. § 1054(g)(1)). To determine whether WSMS violated this provision, a court must determine what benefits may be accrued. ERISA defines “accrued benefit” as the employee’s accrued benefit determined under the plan and expressed in the form of an annual benefit commencing at normal retirement age (26 U.S.C. § 411(a)(7)(A)(i)). This definition requires a court to look at the terms of the plan at issue.
The Plan’s definition of “Accrued Benefit”-which defines the plan’s accrued benefit within ERISA’s meaning- includes any Section 4.12 supplements, including the $700 supplement in question, notwithstanding the word “applicable”. That is, the plain, unambiguous language of the Plan contemplates inclusion of the Section 4.12(a) supplements in its definition of “Accrued Benefit.” As such, the supplement is protected under ERISA’s anti-cutback rule, and may not be amended away. Accordingly, the Court reversed the district court’s ruling, and remanded the case back to district court for further proceedings consistent with its decision.