Comrie v. Ipsco Incorporated, No. 10-2393 (7th Cir. 2011) dealt with a supplemental pension plan for top executives (the “Plan”) maintained by Ipsco Incorporated (“Ipsco”). The Plan was an unfunded top-hat plan for ERISA purposes. It provided benefits which exceeded the tax deferral limit under the Internal Revenue Code. In this case, John W. Comrie, IPSCO’s Chief Legal Officer, resigned and requested his benefits under the Plan. Ipsco agreed that Comrie was entitled to the benefits, but the amount of the benefits was in question.
Benefits under the Plan are based on the number of years the executive has worked at IPSCO times 2% of the executive’s average compensation in the five years before departure. A clause in the Plan provided that a “bonus” is not included in compensation. Here, the parties disagreed as to whether Comrie’s stock options and other stock-linked payments (Comrie’s “Stock-Linked Payments”) should be included in compensation. Comrie said yes, while the committee administering the Plan (the “Administrative Committee) said that the Stock-Linked Payments are bonuses that, based on the foregoing provision of the Plan, should not be included in compensation. The Plan expressly confers interpretive discretion on the Administrative Committee.
The Court upheld the Administrative Committee’s decision, and ruled that the Stock-Linked Payments are bonuses and should not be included in compensation for purposes of determining Comrie’s benefits under the Plan. The Court refused to disregard the language of the Plan that confers interpretive discretion on the Administrative Committee. In doing so, it rejected Comrie’s arguments that members of the committee labored under a conflict of interest and that the administrator of a top-hat plan is not a “fiduciary” for purposes of ERISA.