In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 15‐1717
WILLIAM RABINAK,
Plaintiff‐Appellant,
v.
UNITED BROTHERHOOD OF CARPENTERS
PENSION FUND,
Defendant‐Appellee.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 14 CV 1904 — Manish S. Shah, Judge.
____________________
ARGUED DECEMBER 8, 2015 — DECIDED AUGUST 10, 2016
____________________
Before WOOD, Chief Judge, and BAUER and WILLIAMS, Cir‐
cuit Judges.
WILLIAMS, Circuit Judge. When William Rabinak retired
and received the calculation of his pension benefit, he thought
something was off. The annual salaries listed did not appear
to take into account quarterly payments of $2,500 he received
for serving on his organization’s Executive Board, so he ap‐
pealed and maintained those payments should have been
2 No. 15‐1717
counted. The pension fund appeals committee denied his ap‐
peal. Controlled as we are by a standard of review that asks
only whether the decision was arbitrary and capricious, we
affirm the denial. The plan’s definition of compensation in‐
cludes only “salary,” and the $2,500 quarterly payments for
Board service were paid separately from Rabinak’s weekly
salary payments and coded differently as well. The conclu‐
sion that the payments at issue were not salary payments un‐
der this particular plan was not arbitrary and capricious.
I. BACKGROUND
William Rabinak worked full‐time as a business repre‐
sentative for the Chicago Regional Council of Carpenters. By
virtue of his position, he also served on the Council’s Execu‐
tive Board. Rabinak received quarterly payments of $2,500 for
his service on the Board. The Council made these quarterly
payments in checks separate from those for Rabinak’s weekly
salary.
When he retired, Rabinak qualified for a pension from the
United Brotherhood of Carpenters Pension Fund, an em‐
ployee benefit plan governed by ERISA. After receiving a let‐
ter detailing his annual retirement benefit, Rabinak noticed
that the compensation amount upon which the Fund calcu‐
lated his annual retirement benefit did not include approxi‐
mately $10,000 he had received each year from the Council,
with the result that his retirement payments would be lower
than he thought they should be. Rabinak surmised that the
Fund had not counted the $10,000 per year he received by vir‐
tue of his service on the Executive Board.
Rabinak appealed the Fund’s calculation of his annual
benefit to the Fund’s appeals committee, and he argued that
No. 15‐1717 3
the Executive Board payments were “Compensation” under
the plan because his service on the Board was required as part
of his job duties. The Fund’d plan administrator responded in
a memorandum to the appeals committee that the Council
had informed her it does not make contributions to the Fund
for “Executive Committee wages.” The plan administrator
also included a letter from the Council’s legal counsel, who
took the position that the payment for Executive Board ser‐
vice was a “stipend,” not a wage payment, and was therefore
properly not included in the plan’s definition of “Compensa‐
tion.”
The fund appeals committee, made up of a subcommittee
of the fund’s Board of Trustees, denied Rabinak’s appeal. It
wrote to Rabinak that the specific reason for denial was:
The stipends received from the Regional Coun-
cil of Carpenters for being on the Executive
Committee are not included as Compensation
for purposes of calculating Final Compensation.
Rabinak filed suit under 29 U.S.C. § 1132(a)(1)(B) seeking
to recover pension benefits he maintains are due to him. The
district court granted the Fund’s motion for summary judg‐
ment, and Rabinak appeals.
II. ANALYSIS
We review de novo the district court’s decision to grant
summary judgment to the Fund, and as we do so we view all
facts and draw all reasonable inferences in Rabinak’s favor.
Cerentano v. UMWA Health and Ret. Funds, 735 F.3d 976, 981
(7th Cir. 2013). When, as here, an ERISA plan explicitly gives
the plan administrator discretion to interpret the terms of the
plan, our review of a denial of benefits asks only whether the
4 No. 15‐1717
plan administrator’s decision was arbitrary and capricious.
See id.; see also Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101,
111 (1989) (“A trustee may be given power to construe dis‐
puted or doubtful terms, and in such circumstances the trus‐
tee’s interpretation will not be disturbed if reasonable.”).
Under the terms of the plan at issue, a participant’s
monthly pension payment is based upon his “Final Compen‐
sation,” which the plan defines by a calculation based on his
“Compensation.” In the definition critical for our case, the
plan defines “Compensation” as “all salary” but does not in‐
clude “overtime, or fees or expenses paid or reimbursed.” The
plan also provides that “Compensation” does not include
“the value of employee benefits or other non‐wage payments,
even if such payments are considered income for tax pur‐
poses.” Rabinak argues that the Plan’s determination that the
payments for his service on the Executive Board were not
“Compensation” was arbitrary and capricious, and he em‐
phasizes that his service on the Board was part of his job du‐
ties.
That our standard of review demands that we ask only
whether the denial decision was arbitrary and capricious is
critical here. Under this deferential standard of review, we
must uphold the decision so “long as (1) it is possible to offer
a reasoned explanation, based on the evidence, for a particu‐
lar outcome, (2) the decision is based on a reasonable expla‐
nation of relevant plan documents, or (3) the administrator
has based its decision on a consideration of the relevant fac‐
tors that encompass the important aspects of the problem.”
Holmstrom v. Metro. Life Ins. Co., 615 F.3d 758, 766 (7th Cir.
2010).
No. 15‐1717 5
By the terms of the plan, the Executive Board payments
are only included in Compensation if they are “salary.” But
as the Fund emphasizes, the Council paid Rabinak his annual
salary on a weekly basis. The Executive Board payments were
not included in those checks. Rather, the Executive Board
money was paid out quarterly, and in checks separate from
the weekly payments. The Council also coded the two pay‐
ments differently in its payroll system—“EBOAR” for the Ex‐
ecutive Board payments, and “SALAR” for the others. The
Fund submits that, in light of these facts, a conclusion that the
Board payments were not salary payments was a reasonable
one based on the evidence.
In addition to arguing that the quarterly payments were
not salary, the Fund argues that the Trustees could also have
excluded the Board payments from “Compensation” on the
basis that they were reimbursements for fees and expenses in‐
curred for service on the Executive Board. While the plan does
explicitly exclude from the “Compensation” definition “fees
or expenses paid or reimbursed,” we have several concerns
with this line of argument. Most importantly, there is no evi‐
dence at all in the administrative record that these payments
represented reimbursements for expenses, nor is there any ev‐
idence about the board meetings or any associated expenses.
Indeed, one wonders what expenses could be incurred that
would rise to the level of $10,000 a year in personal expenses
for meetings of the Chicago Regional Council of Carpenters
Executive Board. The Fund also only raised this argument for
the first time before the district court, leaving Rabinak with‐
out the opportunity to respond to it by introducing evidence
into the administrative record refuting the contention that the
payments represented reimbursement for expenses.
6 No. 15‐1717
Here, though, our issues with the Fund’s argument that
the Board payments were reimbursements ultimately do not
matter in light of our standard of review. It is “possible to of‐
fer a reasoned explanation,” based on the evidence in the ad‐
ministrative record, that “Compensation” does not include
the payments Rabinak received for serving on the Executive
Board. See Cerentano, 735 F.3d at 981. Rabinak emphasizes that
the $2,500 quarterly payments were included on Rabinak’s
W‐2 forms as wages and not as expenses or other benefits, and
also that the plan administrator described the payments as
“Executive Committee wages” in a memorandum to the
Fund’s trustees. But the plan makes clear that not all wages
are “Compensation” under the plan’s definition. For one, the
plan specifically excludes overtime from “Compensation.”
The plan also explicitly states that excluded from “Compen‐
sation” are “other non‐wage payments, even if such pay‐
ments are considered income for tax purposes.” While over‐
time payments would be considered wages for tax purposes,
and overtime payments are generally thought of as compen‐
sation in common parlance, it is the plan’s definition that mat‐
ters. Not all “compensation” is “Compensation” under the
plan.
Rabinak’s arguments have some appeal, and it is uncon‐
tested that he had to serve on the Board by virtue of his posi‐
tion. But “[w]hen a plan is open to more than one interpreta‐
tion, we will not find the administrator’s decision arbitrary
and capricious just because we would have reached a differ‐
ent conclusion or relied upon different authority had we been
in the administrator’s shoes.” Carr v. Gates Health Care Plan,
195 F.3d 292, 294 (7th Cir. 1999). That is, it is not enough that
Rabinak’s interpretation may be a reasonable one when our
review is only for whether the trustees’ decision is arbitrary
No. 15‐1717 7
and capricious. See Becker v. Chrysler LLC Health Care Benefits
Plan, 691 F.3d 879, 893 (7th Cir. 2012). Whether payments are
“salary” is what matters under this particular plan. It is not
unreasonable to conclude that if the Council truly was in‐
creasing Rabinak’s salary by $10,000 a year for his Board ser‐
vice, it would have done so by increasing the amount paid in
his separately issued weekly salary checks. In light of our
standard of review, we cannot say that the plan’s interpreta‐
tion was unreasonable.
Rabinak raised several other issues for our consideration.
He reminds us that even in a deferential review like this one,
“courts should be aware of structural conflicts of interest in
reviewing plan decisions for abuse of discretion.” Raybourne
v. Cigna Life Ins. Co. of New York, 576 F.3d 444, 449 (7th Cir.
2009) (citing Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 112
(2008)). One such conflict of interest can occur when a plan
which pays out the benefits is given discretion to make deci‐
sions regarding the denial of benefits. See Glenn, 554 U.S. at
112. Unlike the employer in Glenn who both solely funded the
benefits and determined eligibility, the plan here is a multi‐
employer nonprofit welfare plan. Cf. Manny v. Cent. States, Se.
and Sw. Areas Pension and Health and Welfare Funds, 388 F.3d
241 (7th Cir. 2004) (no conflict of interest where multi‐em‐
ployer plan with equal number of employer and union repre‐
sentatives on appeals committee ruled unanimously and
lacked incentive to rule against applicant). Rabinak points out
that Frank Libby, the president of his former employer, the
Council, is on the plan’s Board of Trustees. But the fund’s ben‐
efit appeals are decided by a subcommittee of the Board of
Trustees of which Libby was not a member, so he was not in‐
volved in the decision to deny Rabinak’s appeal. There is also
no suggestion he influenced the decision here. In any event,
8 No. 15‐1717
the Supreme Court tells us that the presence of a conflict will
“act as a tiebreaker when the other factors are closely bal‐
anced.” Glenn, 554 U.S. at 117. “When the case is borderline,
in other words, the inherent conflict of interest that exists in
so many of these situations can push it over the edge—to‐
wards a finding of capriciousness.” Jenkins v. Price Waterhouse
Long Term Disability Plan, 564 F.3d 856, 861 (7th Cir. 2009).
This, however, is not a borderline case; the denial decision has
“rational support in the record.” See id. at 861.
Rabinak also argues that the determination was arbitrary
and capricious for failure to provide specific reasons for its
exclusion of the quarterly payments. A decision must give
“specific reasons” for the denial. 29 U.S.C. § 1133(1). But “that
is not the same thing as the reasoning behind the reasons” or
“the interpretive process that generated the reason for the de‐
nial.” Gallo v. Amoco Corp., 102 F.3d 918, 922 (7th Cir. 1996); see
also Militello v. Cent. States, Se. and Sw. Areas Pension Fund, 360
F.3d 681, 689 (7th Cir. 2004). The important point is that the
reason given is a sufficient explanation to allow the recipient
to “formulate his further challenge to the denial.” Id. The
plan’s denial did so here, and Rabinak has formulated and
made well‐developed arguments from the beginning that the
Board payments should be included in “Compensation.”
Finally, Rabinak argues that the district court improperly
relied on evidence outside the administrative record. We dis‐
agree. The court’s order cites the fund’s motion for summary
judgment and exhibits that were not part of the administra‐
tive record, but it does so only to compare the parties’ fram‐
ings of the issue and to explain the fund’s position. Doing so
does not equate to improper reliance on documents outside
No. 15‐1717 9
the administrative record to make a substantive determina‐
tion. See Oates v. Discovery Zone, 116 F.3d 1161, 1169 n.8 (7th
Cir. 1997).
III. CONCLUSION
The judgment of the district court is AFFIRMED.