United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued May 6, 2011 Decided July 15, 2011
No. 10-7100
JAMES C. STEPHENS AND RICHARD MAHONEY,
APPELLANTS
v.
US AIRWAYS GROUP, INC., ET AL.,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:07-cv-01264)
Jacks C. Nickens argued the cause for appellants. With
him on the briefs was Robert P. Trout. Paul D. Flack entered
an appearance.
Jean M. Breen argued the cause for appellee Pension
Benefit Guaranty Corporation. With her on the brief were
Israel Goldowitz, Stephanie L. Thomas, Mark R. Snyder, and
Colin B. Albaugh.
2
Before: HENDERSON, BROWN and KAVANAUGH, Circuit
Judges.
Opinion for the Court filed by Circuit Judge BROWN.
Opinion concurring in the judgment filed by Circuit
Judge KAVANAUGH.
Opinion dissenting in part filed by Circuit Judge
HENDERSON.
BROWN, Circuit Judge: James Stephens and Richard
Mahoney (collectively “Plaintiffs”) are retired U.S. Airways
pilots. Each received pensions from the U.S. Airways
pension plan (“the Plan”). And each opted to receive his
pension in a single lump sum rather than as an annuity. The
Plan paid those lump sums 45 days later than Plaintiffs would
have received their first checks had they chosen the annuity
option. Plaintiffs sued U.S. Airways, claiming the Plan owed
them interest for its 45-day delay. The district court
disagreed. We now reverse in part and affirm in part,
remanding for further consideration consistent with this
opinion.
I
James Stephens and Richard Mahoney retired from their
jobs as U.S. Airways pilots in 1996 and 1999, respectively.
Both pilots qualified for a pension under the U.S. Airways
pension plan. The Plan’s default pension was an annuity, to
be paid in monthly installments. But the Plan also allowed a
retiree to receive his pension as a single lump sum payment
actuarially equivalent to the projected value of all annuity
payments. Plaintiffs chose to receive their pensions as lump
sums.
3
The Plan provided that annuity payments would begin on
the first day of the month after the pilot retired (and
retirement was mandatory at age 60). If the retiring pilot
elected the lump sum option, however, the Plan did not
actually pay that lump sum until 45 days after the first day of
the month after the pilot retired. In other words, the Plan paid
lump sum pensions 45 days later than Plaintiffs would have
received their first payments had they selected the annuity
option. U.S. Airways claimed this delay was administratively
necessary because of additional calculations and precautions
it takes when issuing lump sums. Important to the present
dispute, the delayed lump sum payments did not include any
interest for the 45 days that elapsed between the annuity start
date and the date lump sum recipients actually received their
payments.
Stephens and Mahoney each received their lump sum
pensions 45 days after their annuity start date. Stephens
received $488,477.22. Mahoney received $672,162.79.
Applying the 6.25% interest rate suggested by Plaintiffs’
expert, Stephens should have received $3,665.06 in interest
on his lump sum payment for the 45-day delay, and Mahoney
should have received $5,043.25 in interest on his payment.
In 2000, Stephens and Mahoney sued U.S. Airways for
the interest on the 45 day delay. According to Plaintiffs, U.S.
Airways’ refusal to pay interest violated the Employee
Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et
seq. (“ERISA”), which requires the Plan’s lump sum
payments to be the “actuarial equivalent” of the Plan’s
annuity payments. 29 U.S.C. § 1054(c)(3). Plaintiffs
separately alleged that the terms of the Plan required U.S.
Airways to pay lump sums on the annuity start date.
4
Plaintiffs initially sued U.S. Airways in the U.S. District
Court for the Northern District of Ohio. In 2003, the Plan was
terminated due to U.S. Airways’ bankruptcy, and the Pension
Benefit Guaranty Corporation (“PBGC”) became the Plan’s
trustee. See id. § 1342. In 2007, the case was therefore
transferred to the U.S. District Court for the District of
Columbia.
In two decisions—the first on a motion to dismiss and the
second on a motion for summary judgment—the district court
rejected all of plaintiffs’ claims. We review those decisions
de novo. See Winder v. Erste, 566 F.3d 209, 213 (D.C. Cir.
2009).
II
Plaintiffs claim the lump-sum payments they received
were worth less than annuities they could have received under
the Plan, and therefore violated the actuarial equivalence
requirement of § 1054(c)(3). As they see it, U.S. Airways
calculated each lump-sum payment to be worth as much as
the annuity on the annuity start date, but then withheld
payment until 45 days after the annuity start date. According
to Plaintiffs, U.S. Airways thus owed them the interest on
their lump sums for the 45 days between the annuity start date
and the lump sum payment date. On the other hand, PBGC
argues it does not matter whether Plaintiffs actually received
their lump sum payments on the annuity start date so long as
the Plan accurately calculated lump sums that were equivalent
to the annuity at the time they were calculated.
ERISA establishes minimum standards for private
pension plans. If a plan allows retirees to select a lump-sum
payment in lieu of an annuity—the lump sum payment “shall
be the actuarial equivalent” of the annual benefit. 29 U.S.C.
5
§ 1054(c)(3); see also Esden v. Bank of Boston, 229 F.3d 154,
163 (2d Cir. 2000) (noting that ERISA requires lump sum
payments to “be worth at least as much as that annuity”).
Although ERISA does not further define actuarial
equivalence, we assume Congress intended that term of art to
have its established meaning. See McDermott Int’l, Inc. v.
Wilander, 498 U.S. 337, 342 (1991). Two modes of payment
are actuarially equivalent when their present values are equal
under a given set of actuarial assumptions. See JEFF L.
SCHWARTZMANN & RALPH GARFIELD, EDUCATION &
EXAMINATION COMM. OF THE SOCIETY OF ACTUARIES,
ACTUARIALLY EQUIVALENT BENEFITS 1, EA1-24-91 (1991),
available at http://www.soa.org/files/pdf/edu-2009-fall-ea1-
02-sn.pdf. One such assumption is that payment begins on
the annuity start date.
Actuarial equivalence prohibits a lump-sum payment that
does not include the full value of the benefits a retiree would
otherwise receive if he were to receive his pension in the form
of an annuity. See Contilli v. Local 705 Int’l Bhd. of
Teamsters Pension Fund, 559 F.3d 720, 722 (7th Cir. 2009)
(concluding a plan’s lump-sum payment violated § 1054(c)(3)
because it failed to adjust for post-retirement, pre-application
benefits); Miller v. Xerox Corp. Retirement Income
Guarantee Plan, 464 F.3d 871, 874 (9th Cir. 2006) (same for
failure to adjust for previous distribution offsets). But
§ 1054(c) does not address whether (or to what extent)
interest is owed when an actuarially equivalent pension is
paid late. By comparison, § 1054(e)(3) requires a defined
benefit plan to repay distributions that improperly reduce
employee service credit with “interest at the rate determined
for purposes of subsection (c)(2)(C).” 29 U.S.C.
§ 1054(e)(3). Because there is no dispute U.S. Airways
accurately calculated Plaintiffs’ lump sums to be the
“actuarial equivalent” of the annuity option as of the annuity
6
start date, the lump sum payment does not violate
§ 1054(c)(3).
But a pension plan could not satisfy ERISA by correctly
calculating an actuarially equivalent lump sum, then delaying
payment of that sum indefinitely. To this end, an Internal
Revenue Service (IRS) regulation provides that “[a] payment
shall not be considered to occur after the annuity starting date
merely because actual payment is reasonably delayed for
calculation of the benefit amount if all payments are actually
made.” 26 C.F.R. § 1.401(a)-20 (Question & Answer
10(b)(3)); cf. Rose v. Long Island R.R. Pension Plan, 828 F.2d
910, 918 (2d Cir. 1987) (noting the IRS is “one of the
agencies charged with administering ERISA”). By
distinguishing the annuity starting date from the date of actual
payment, see id. (Question & Answer 10(b)(2)) (“The annuity
starting date is the first date for which an amount is paid, not
the actual date of payment.”), section 1.401(a)-20 bolsters our
conclusion that U.S. Airways’ late payment of Plaintiffs’
lump sums does not violate § 1054(c)(3). Nevertheless, the
IRS regulation permits only “reasonable delays” in payment.
The remaining question is whether U.S. Air’s 45-day
delay was reasonable. It was not. According to an analysis
U.S. Air conducted during the 1990s, calculation of a lump
sum payment took at most 21 business days: 7 to 10 business
days to complete data checks and benefit calculations, 2 to 3
business days to review the calculations and check for
qualified domestic relations, 3 to 5 business days to transmit a
check, and 3 business days to review the check. Twenty-one
business days corresponds to approximately one calendar
month. Aside from restating the process required to calculate
lump sum payments, PBGC makes no argument explaining
why Plaintiffs’ lump sums were additionally delayed. In the
absence of any contrary evidence, U.S. Air’s 45-day delay
7
appears unrelated to the administrative calculation of
Plaintiffs’ lump sum benefits. And, because the delay does
not correspond to administrative necessity, it is not
“reasonable.”1 See 26 C.F.R. § 1.401(a)-20 (Question &
Answer 10(b)(3)). Plaintiffs’ expert evidence that 45 days is
outside of the industry norm bolsters this conclusion. He said
that “in practice” pension plans deem delays of 30 days or
less—not 45 days—as “reasonable.”
The Dissent argues remanding this case “may well open
the courthouse doors to litigation over de minimis amounts of
interest accrued during a few weeks or even days.” Diss. Op.
at 3. But again, future plaintiffs may recover only interest
when lump-sum payments are unreasonably delayed. Plan
administrators may demonstrate in any given case a delay is
reasonable because it relates to the administrative calculation
of lump sum benefits—a task, undoubtedly, made more
difficult the longer the delay. In this way, the probability of
litigation is correlated with the length of delay. Settlement is
likely when delays are lengthy and difficult to tie to
administrative necessity; litigation is unlikely when delays are
small and any potential recovery may not cover the costs of
litigation. Thus, the flood the Dissent fears may amount to a
mere trickle. And to the extent the courthouse doors are open
to suits concerning sizable and unreasonable delays, they
should be.
1
The Dissent argues I “omit one important detail,” namely, that
“the pension plan administrator has to know the pilot’s ‘Final
Average Earnings.’” Diss. Op. at 2. But the Dissent’s conclusion
this calculation potentially takes 18 days is a red herring. That the
paycheck pilots receive on the 18th of every month “reflects actual
earnings for the month” says nothing of how long it took the Plan to
calculate those earnings. Moreover, given pilots’ mandatory
retirement on their 60th birthday, the Plan has notice of when a pilot
will retire and can plan accordingly.
8
In sum, Plaintiffs’ lump sums were the “actuarial
equivalent” of the annuity option under the Plan at the time of
the annuity start date. Because U.S. Air unreasonably delayed
payment, however, Plaintiffs are entitled to interest.
III
Plaintiffs also argue they are entitled to attorney’s fees.
The default “American rule” is that the prevailing party does
not receive attorney’s fees. To receive attorney’s fees,
Plaintiffs must identify some circumstance that overcomes
that default rule. See Alyeska Pipeline Serv. Co. v. Wilderness
Soc’y, 421 U.S. 240, 247, 257–60 (1975). ERISA provides
for attorney’s fees in certain actions against private plan
administrators, see 29 U.S.C. § 1303(f)(3), but the statute
does not authorize attorney’s fees for actions against the
PBGC, such as this case. Plaintiffs cite 28 U.S.C. § 2412(b)
as an authorization for attorney’s fees. Section 2412(b)
allows fees against the Government “to the same extent that
any other party would be liable . . . under the terms of any
statute which specifically provides for such an award.” Here,
however, plaintiffs are suing under 29 U.S.C. § 1303(f), and
no party other than the Government can be liable under that
statute, because 1303(f) provides a cause of action only
against the PBGC. Section 2412(b) thus does not authorize
attorney’s fees in this case.
IV
We reverse the judgment of the District Court with
respect to Plaintiffs’ actuarial equivalence claim. The amount
of Plaintiffs’ lump sum benefit was equal to the actuarial
present value of the annuity payments Plaintiffs would have
received under the Plan’s default payment option. Even so,
9
U.S. Air’s 45-day delay in paying Plaintiffs was unrelated to
the calculation of Plaintiffs’ benefits, and therefore not
reasonable under existing IRS regulations. We therefore
remand to the district court to calculate the appropriate
amounts due Plaintiffs. In addition, we affirm the judgment
of the district court that Plaintiffs are not entitled to attorney’s
fees.
So ordered.
KAVANAUGH, Circuit Judge, concurring in the
judgment: 1
I concur only in the judgment. In my view, Stephens and
Mahoney should receive interest for the full 45 days that U.S.
Airways delayed payment of their lump sum pensions.
Under ERISA, if a pension plan allows retirees to select a
lump sum payment in lieu of an annuity, the lump sum
payment “shall be the actuarial equivalent” of the annuity. 29
U.S.C. § 1054(c)(3). That means that the lump sum must “be
worth at least as much as that annuity.” Esden v. Bank of
Boston, 229 F.3d 154, 163 (2d Cir. 2000). The lump sums
that plaintiffs received were worth less than the plan’s annuity
option. Therefore, those lump sum payments violated
ERISA.
There is no dispute that U.S. Airways accurately
calculated plaintiffs’ lump sums to be the “actuarial
equivalent” of the annuity option as of the annuity start date.
There is also no dispute that the plan paid those lump sum
amounts 45 days after the annuity start date. The question
before this Court is therefore simple: If a lump sum and an
annuity would be actuarially equivalent if the lump sum were
paid on the annuity start date, is the same lump sum amount
actuarially equivalent to the annuity when the lump sum is
actually paid 45 days later than the annuity start date?
In my view, the answer is also simple: No. Money later
is not the same as money now. Receiving $1000 45 days
from now is not equivalent to receiving $1000 now, because
(among other things) that $1000 can earn interest every day
one has it. It is true that the concept of actuarial equivalence
1
Judge Brown’s opinion is the controlling opinion in this case
because it presents the narrowest grounds of the opinions forming a
majority. See Marks v. United States, 430 U.S. 188, 193 (1977).
2
can be difficult to apply in some cases – for example, when
comparing the value of health insurance plans that offer
different menus of benefits. But the concept is easy to apply
here. Money has time value. And because the lump sum
payments had the same value as the annuity on the annuity
start date, the lump sums U.S. Airways paid 45 days later
were worth less than the annuity. U.S. Airways’ pension plan
thus violated ERISA’s requirement that lump sum payments
“be the actuarial equivalent” of the plan’s annuity option. 29
U.S.C. § 1054(c)(3); see also Berger v. Xerox Corp.
Retirement Income Guarantee Plan, 338 F.3d 755, 759 (7th
Cir. 2003) (Posner, J.) (“The basic tradeoff involved in
determining actuarial equivalence between a lump sum and an
accrued pension benefit is between a present and a future
value, and the method of equating them is the application of a
discount rate to the future value.”).
According to PBGC, so long as U.S. Airways accurately
calculated lump sums that were equivalent to the annuity on
the annuity start date, it does not matter that the delayed lump
sums plaintiffs actually received were less valuable than the
theoretical, timely lump sums. But ERISA’s actuarial
equivalence requirement serves to protect actual retirees, not
merely to ensure that pension plans correctly perform abstract
calculations. Therefore, “ERISA requires actuarial
equivalence between the actual distribution and the accrued
benefit it replaces.” Miller v. Xerox Corp. Retirement Income
Guarantee Plan, 464 F.3d 871, 874 (9th Cir. 2006) (emphasis
added). A pension plan could not satisfy ERISA by correctly
calculating an actuarially equivalent lump sum, then paying
only half that sum to a retiree. Similarly, a pension plan
cannot satisfy ERISA by correctly calculating an actuarially
equivalent lump sum, then delaying payment of that sum until
a date when the sum has become less valuable.
3
U.S. Airways – and now PBGC, as U.S. Airways’
successor – owes plaintiffs the difference in value between
the lump sums plaintiffs received and the value of those sums
45 days earlier on the annuity start date. That difference in
value is, of course, the interest on plaintiffs’ lump sum
pensions for the 45 days that the pension plan delayed
payment of those pensions. See Contilli v. Local 705 Int’l
Brotherhood of Teamsters Pension Fund, 559 F.3d 720, 722
(7th Cir. 2009) (Easterbrook, C.J.) (“payments skipped as a
result of the deferral must be made up, either by payment
(with interest) once the deferral ends, or by a suitable
actuarial adjustment to the ongoing benefits”); see generally
Esden, 229 F.3d at 163-65.
To be sure, ERISA tolerates reasonable delays for a plan
to calculate and make a lump sum payment. But any delayed
payment must be made “with interest” in order to ensure that
“the value of the pension is [not] lower than one that begins
on the normal retirement date.” Contilli, 559 F.3d at 722.
ERISA’s actuarial equivalence requirement contains no
exception permitting a plan to withhold interest payments for
administrative delays. See 29 U.S.C. § 1054(c)(3). Put
another way, ERISA permits pension plans to reasonably
delay lump sum payments, but it requires that delayed lump
sum payments remain actuarially equivalent to annuity
payments. Here, that means these plaintiffs were entitled to
interest for the 45 days that U.S. Airways delayed payment of
their lump sum pensions – regardless of whether U.S.
Airways’ delay in making the actual payments was
reasonable.
In ignoring the effect of the delay on the value of the
lump sum payments that plaintiffs received, PBGC cites an
IRS regulation establishing that reasonable administrative
delays in a pension’s annuity payments do not affect
4
survivorship benefits claims. See 26 C.F.R. § 1.401(a)-20,
Q&A-10(b)(3). But that IRS regulation says nothing about
whether interest is due on delayed payments, and likewise
says nothing about ERISA’s requirement that lump sums
(delayed or otherwise) be actuarially equivalent to annuities.
PBGC also relies on a statement by plaintiffs’ expert that
pension plans “in practice” often deem delays of 30 days or
less “reasonable” and do not pay interest. J.A. 430-31.
Plaintiffs’ expert did not say that late payments are actuarially
equivalent, only that “in practice” some pension plans pretend
that late payments are actuarially equivalent. Regardless of
whether some pension plans ignore ERISA’s requirements at
the margins, the law is clear, and we should enforce it as
written in this case. 2
2
I agree with the controlling opinion in affirming the District
Court’s denial of plaintiffs’ request for attorney’s fees.
KAREN LE CRAFT HENDERSON, Circuit Judge, dissenting in part:
While we all agree that the Employee Retirement Income
Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001 et seq., does
not allow the plaintiffs to recover attorneys’ fees in their suit
against the Pension Benefit Guaranty Corporation (PBGC),
see Opinion of Judge Brown (Brown Op.) at 8; Opinion of Judge
Kavanaugh (Kavanuagh Op.) at 4 n.1, I also believe that they are
not entitled to recoup forty-five days’ interest for the delayed
payment of their lump sum benefits. Accordingly, I dissent in
part.
The actuarial equivalence requirement set forth in 29 U.S.C.
§ 1054(c)(3) is “clear,” Kavanaugh Op. at 4, and requires a lump
sum payment to be “ ‘worth at least as much as’ ” an annuity
commencing at the normal retirement age, Brown Op. at 4–5
(quoting Esden v. Bank of Boston, 229 F.3d 154, 163 (2d Cir.
2000), cert. dismissed, 531 U.S. 1061 (2001))—which annuity,
under the U.S. Airways plan, becomes due on the “Benefit
Commencement Date,” the first day of the month following the
pilot’s sixtieth birthday. Moreover, Judge Brown and I agree
that as long as the lump sum benefit is equivalent to the present
value of a pilot’s retirement benefit calculated as of his Benefit
Commencement Date, payment may be “reasonably delayed”
without running afoul of the actuarial equivalence rule. Brown
Op. at 5–6. Any other interpretation could impose a daunting
administrative burden on a pension plan administrator, requiring
interest to be paid or benefits to be recalculated for even the
slightest delay in payment—including, for instance, the time it
takes for a pension check to travel through the mail. As Judge
Brown notes, the Internal Revenue Service (IRS)—“one of the
agencies charged with administering ERISA,” Rose v. Long
Island R.R. Pension Plan, 828 F.2d 910, 918 (2d Cir. 1987),
cert. denied, 485 U.S. 936 (1988)—sensibly avoids this
burdensome result by creating an exemption for a reasonable
delay in payment. Brown Op. at 6; see 26 C.F.R. § 1.401(a)-20,
Q&A-10(b)(3). The IRS regulation states: “A payment shall not
be considered to occur after the annuity starting date merely
2
because actual payment is reasonably delayed for calculation of
the benefit amount if all payments are actually made.” 26 C.F.R.
§ 1.401(a)-20, Q&A-10(b)(3) (emphasis added). Put another
way, we must “consider[]” the lump sum payments here to have
“occur[red]” on each plaintiff’s respective Benefit
Commencement Date so long as payment was only “reasonably”
delayed.1
I have no doubt that payment was “reasonably”
delayed—and here I part ways with Judge Brown. According to
Judge Brown, it was reasonable for U.S. Airways to delay
payment while its pension plan administrator calculated benefits,
reviewed these calculations, checked for qualified domestic
relations orders, cut the check and then sent it to the pilot.
Brown Op. at 6–7. These tasks required fifteen to twenty-one
business days to complete—corresponding to roughly three to
four calendar weeks. Judge Brown, however, omits one
important detail. In order to begin calculations in the first
place—and set the three- to four-week process in motion—the
pension plan administrator has to know the pilot’s “Final
Average Earnings,” a number derived in part from the pilot’s
earnings during his final month before retirement. Unlike a
salaried employee, a pilot working for US Airways earns an
hourly wage. His pay can fluctuate considerably from one month
to the next based on the number of hours logged and
differentials for night pay, “overwater pay” and other
adjustments. Weidenmuller Dep. at 65–66 (Joint Appendix (JA)
1
Although the regulation on its face applies only to a joint and
survivor annuity, I nevertheless believe it should guide our analysis
because there is no practical difference from a pension plan
administrator’s point of view between paying a joint and survivor
annuity and paying a lump sum benefit. I note that the regulation is
“written in question and answer form” but “[t]his novel format does
not alter [its] weight as regulation[].” Hurwitz v. Sher, 982 F.2d 778,
782 n.4 (2d Cir. 1992), cert. denied, 508 U.S. 912 (1993).
3
185–86). Because of the month-to-month variance, the pilot’s
final-month earnings are not calculated and finalized until the
eighteenth day of the month following his retirement.2 Taking
into account the eighteen-day delay at the front end, I calculate
the entire sequence—from computing a pilot’s final-month
salary to payment of his lump sum benefit—required roughly
forty to forty-five days.
Judge Brown maintains that we should not take into account
the eighteen-day period for computing a pilot’s final-month
earnings because the pension plan administrator knows the
pilot’s retirement date in advance and “can plan accordingly.”
Brown Op. at 7 n.1. The unknown quantity, however, is not the
date of the pilot’s retirement but the amount of his final-month
earnings—which, as noted above, varies from one month to the
next. Judge Brown also seems to doubt whether eighteen days
is really necessary to calculate the pilot’s final-month earnings.
See id. (eighteen-day delay “says nothing of how long it took the
Plan to calculate [final-month] earnings”). The burden of proof,
however, does not rest on US Airways (or its successor, the
PBGC) to establish the reasonableness of the forty-five day
delay in paying the plaintiffs’ lump sum benefits. Rather, it is
the plaintiffs’ burden to establish the unreasonableness of the
delay—including both the eighteen-day period to compute final-
month earnings and the two- to three-week period to calculate
the lump sum benefit amount. Cf. Horton v. Reliance Standard
Life Ins. Co., 141 F.3d 1038, 1040 (11th Cir. 1998) (ERISA
plaintiff “bears the burden of proving his entitlement to
contractual benefits”). Because the plaintiffs have not carried
their burden, I would affirm the district court’s denial of interest.
2
For example, plaintiff Stephens retired on November 25, 1996.
His earnings for the month of November were calculated and he
received his final paycheck—reflecting his November earnings—on
December 18, 1996. Only then did the pension plan administrator have
the necessary information to calculate Stephens’s lump sum benefit.
4
My colleagues’ decision to remand may well open the
courthouse doors to litigation over de minimis amounts of
interest accrued during a few weeks or even days. The plaintiffs’
victory is hollow to say the least in light of our holding denying
attorney’s fees; they are left with a four-digit recovery and,
undoubtedly, five- or even six-digit legal costs. Moreover, Judge
Brown concedes that a delay of up to thirty days would be
reasonable. Brown Op. at 6–7. Because she and I agree that US
Airways acted reasonably at least up to the thirty-day mark, the
plaintiffs should recover—at most—fifteen days’ interest,
meaning they should receive no more than one-third of the
amount they are asking for. The difference is important given
the likelihood that on remand the plaintiffs will ask for
prejudgment interest going back roughly fifteen years
(Stephens) and twelve years (Mahoney). See Moore v.
CapitalCare, Inc., 461 F.3d 1, 12 (D.C. Cir. 2006) (prejudgment
interest “presumptively appropriate” for unpaid ERISA
benefits). Assuming the plaintiffs do so, the applicable interest
rate is within the district court’s discretion, see Berger v. Iron
Workers Reinforced Rodmen, Local 201, 170 F.3d 1111, 1139
(D.C. Cir. 1999). Given the significant decline in long-term
interest rates, however, I doubt that the rate of 6.25 per cent,
suggested by the plaintiffs’ expert, Poulin Decl. ¶ 8, would be a
proper rate to carry the interest forward to the judgment date.
See Pension Benefit Guar. Corp., Lump Sums,
http://www.pbgc.gov/prac/interest/vls.html (last visited June 1,
2011).
Finally, because the plaintiffs are entitled only to
“appropriate equitable relief” under ERISA, 29 U.S.C.
§ 1303(f)(1), it is worth noting that they have already received
more than many U.S. Airways annuitants will ever see. U.S.
Airways pilots who reached retirement age after April 1,
2000—a few years after plaintiff Stephens and just thirteen
months after plaintiff Mahoney—received nothing from the
distribution of plan assets and thus had their benefits capped at
5
the statutory maximum of $28,585.20 per year, see 29 U.S.C.
§ 1322(a)–(b); 29 C.F.R. pt. 4011, app. B; Press Release,
Pension Benefit Guar. Corp., PBGC Becomes Trustee of US
Airways Pension Plan for Pilots (Apr. 1, 2003)
[http://www.pbgc.gov/news/press/releases/pr03-32.html], in
some cases collecting less than 50 cents on the dollar. In re US
Airways Grp., Inc., 296 B.R. 734, 741 (Bankr. E.D. Va. 2003);
Nanette Byrnes & David Welch, The Benefits Trap, Bus. Wk.,
July 19, 2004; Kathleen Pender, What They’ll Get: How Pension
Agency Pays Out, S.F. Chron., May 12, 2005, at C1. It hardly
seems equitable to gild the plaintiffs’ lily, even minimally, when
they are already far better off than their hapless annuitant peers.
Accordingly, I respectfully dissent in part.