Jeffrey Plotnick v. Computer Sciences Corporation, 875 F.3d 160

Background

Plotnick and Kennedy, former CSC executives, participated in an unfunded "top-hat" deferred compensation Plan that credits notional accounts with a board-selected crediting rate and pays benefits from corporate assets on retirement.
The Plan expressly permitted the CSC Board to amend the crediting rate but barred any amendment that would decrease a participant’s account value as of the amendment’s effective date and required uniform administration for similarly situated participants.
From 2003–2012 CSC used a predictable Merrill Lynch–based crediting rate that yielded effectively equal annual installments (with a final "true-up").
The Board adopted a 2012 Amendment replacing the single benchmark crediting rate with participant-selectable valuation funds (four options), introducing market exposure and less predictability in annual installments; the amendment applied uniformly and did not reduce account balances at the effective date.
Plotnick and Kennedy retired in 2012, challenged the 2012 Amendment as a post-retirement unilateral-contract breach (illusory promise), and sued under ERISA § 1132(a); the district court denied class certification and granted summary judgment for CSC.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Plan allowed post-retirement amendment of the crediting rate	Plan was a unilateral contract once participants retired; Board could not amend credited rate after retirement	Plan text expressly subjects the crediting rate to Board amendment and defines participants without distinguishing retirees	The Plan’s plain language permitted the Board to amend the crediting rate; amendment was valid
Whether the 2012 Amendment rendered Plan promises illusory by introducing risk/volatility	The Amendment stripped guaranteed predictability and thus made promised benefits illusory	The Plan placed no textual limit on the risk level of a crediting rate and protected against immediate reduction in account value at amendment	No illusory promise: the Plan contained no promise of a specific volatility profile; increased risk did not breach the Plan
Whether the Amendment violated the requirement of "approximately equal annual installments"	The new variable crediting rates prevent equal annual payments and thus violate the Plan	The Plan requires only "approximately equal" payments; CSC’s annual recalculation method reasonably satisfies that requirement	The recalculation method yields "approximately equal" installments; the Plan does not require strict equality
Proper standard of review for top-hat plan benefit-denial	(Argued implicitly) Contract-based de novo review for top-hat plans (unilateral contract approach)	Firestone abuse-of-discretion applies where plan grants discretionary authority; either standard yields same result here	Court declined to pick between standards; concluded under any applicable standard the Amendment and denial were reasonable and affirmed

Key Cases Cited

Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (standard of review for ERISA benefit denials)
Goldstein v. Johnson & Johnson, 251 F.3d 433 (3d Cir.) (top-hat plans treated as unilateral contracts)
Comrie v. IPSCO, Inc., 636 F.3d 839 (7th Cir.) (Firestone applied to top-hat plans; honor contractual discretion)
Sznewajs v. U.S. Bancorp Am. & Rest. Supp. Benefits Plan, 572 F.3d 727 (9th Cir.) (applies Firestone to top-hat plans and analyzes structural conflicts)
Niebauer v. Crane & Co., Inc., 783 F.3d 914 (1st Cir.) (declined to decide standard and proceeded under deferential review)
Booth v. Wal-Mart Stores, Inc. Assocs. Health & Welfare Plan, 201 F.3d 335 (4th Cir.) (reasonableness standard under discretion review)
Helton v. AT&T, 709 F.3d 343 (4th Cir.) (Booth factors for reviewing administrator discretion)
Ret. Comm. of DAK Ams. LLC v. Brewer, 867 F.3d 471 (4th Cir.) (federal common law of contracts governs ERISA plan interpretation)