Ingram v. Terminal Railroad Ass'n of St. Louis Pension Plan
812 F.3d 628
8th Cir.2016Background
- Theodore Ingram, formerly at Union Pacific, took a job with Terminal Railroad Association of St. Louis in July 2006 and received a $142,737.20 “sign-on bonus.”
- Ingram retired from Terminal at end of 2010 and asserted Terminal’s Pension Plan should include the 2006 payment in his Average Monthly Earnings for pension calculation.
- Plan administrator Kerry Paubel excluded the 2006 payment as a taxable moving-expense allowance under Plan §2.14; inclusion would have greatly increased Ingram’s pension.
- Paubel also applied an offset under Plan §5.5(b) against Terminal benefits equal to the normal-retirement benefit Ingram would have received from Union Pacific (age-65 amount), not the smaller early-retirement benefit Ingram actually receives.
- Ingram sued under ERISA §502(a)(1)(B). The district court reviewed the administrator’s decisions for abuse of discretion, granted summary judgment for the Plan, and the Eighth Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the July 2006 “sign-on bonus” must be included in Average Monthly Earnings | Ingram: contemporaneous labels and lack of conditions show it was compensation/bonus and should count as earnings | Terminal/Paubel: evidence shows it was intended to reimburse relocation costs and fits Plan §2.14 exclusion for reimbursements/expense allowances | Court: Paubel’s classification as a taxable relocation expense allowance was reasonable; no abuse of discretion |
| Whether additional evidence (Paubel affidavit) could be admitted and whether that admission changed standard of review | Ingram: district court’s reopening and affidavit require de novo review; administrator relied on post-hoc rationale | Terminal: extra evidence was limited to determining standard of review; merits remain confined to administrative record under abuse-of-discretion | Court: district court properly admitted extra evidence only to decide standard of review; merits reviewed on administrative record under abuse-of-discretion |
| Whether alleged procedural irregularities/conflict of interest require less deferential review | Ingram: alleged procedural irregularities and initial confusion over administrator identity justify de novo review | Terminal: Glenn and Firestone limit effect of conflicts — they are a factor, not an automatic change in standard | Court: no serious breach shown; abuse-of-discretion review applies (discretion granted by Plan §14.6) |
| Proper interpretation of offset in §5.5(b): offset by amount "retirement income payable" under other plan — actual early benefit vs. normal retirement benefit | Ingram: "payable" means the amount payable when benefits commence (the actual early-retirement payments he receives) | Terminal/Paubel: "payable" is ambiguous; reasonable to offset the normal retirement benefit (age-65) to avoid apples-to-oranges disparities and subsidies | Court: term ambiguous; Paubel’s interpretation (offset by normal retirement benefit) was reasonable and not an abuse of discretion |
Key Cases Cited
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (Sup. Ct. 1989) (administrator’s plan-interpretation reviewed de novo unless plan grants discretionary authority)
- Metro. Life Ins. Co. v. Glenn, 554 U.S. 105 (Sup. Ct. 2008) (conflicts of interest are a factor in abuse-of-discretion review but do not automatically convert the standard to de novo)
- King v. Hartford Life & Accident Ins. Co., 414 F.3d 994 (8th Cir. 2005) (administrative-record limitation and treatment of post-hoc rationales)
- Jobe v. Med. Life Ins. Co., 598 F.3d 478 (8th Cir. 2010) (reviewing whether district court applied correct standard of review)
- Waldoch v. Medtronic, Inc., 757 F.3d 822 (8th Cir. 2014) (additional evidence may be admitted only to determine proper standard of review)
- Midgett v. Wash. Grp. Int’l Long Term Disability Plan, 561 F.3d 887 (8th Cir. 2009) (definition of reasonable decision under abuse-of-discretion standard)