Filed: Mar. 29, 2016
Latest Update: Mar. 29, 2016
Summary: ENTRY ON DEFENDANTS' MOTION FOR JUDGMENT ON THE PLEADINGS RICHARD L. YOUNG , Chief District Judge . As part of the merger of the Pension Plan for Salaried Employees of Southern Indiana Gas and Electric Company ("SIGECO Plan") into the Vectren Corporation Combined Non-Bargaining Retirement Plan ("Vectren Plan"), Plaintiffs, all of whom were SIGECO Plan participants immediately before the plan merger, were offered the choice of having their future benefits under the Vectren Plan calculated us
Summary: ENTRY ON DEFENDANTS' MOTION FOR JUDGMENT ON THE PLEADINGS RICHARD L. YOUNG , Chief District Judge . As part of the merger of the Pension Plan for Salaried Employees of Southern Indiana Gas and Electric Company ("SIGECO Plan") into the Vectren Corporation Combined Non-Bargaining Retirement Plan ("Vectren Plan"), Plaintiffs, all of whom were SIGECO Plan participants immediately before the plan merger, were offered the choice of having their future benefits under the Vectren Plan calculated usi..
More
ENTRY ON DEFENDANTS' MOTION FOR JUDGMENT ON THE PLEADINGS
RICHARD L. YOUNG, Chief District Judge.
As part of the merger of the Pension Plan for Salaried Employees of Southern Indiana Gas and Electric Company ("SIGECO Plan") into the Vectren Corporation Combined Non-Bargaining Retirement Plan ("Vectren Plan"), Plaintiffs, all of whom were SIGECO Plan participants immediately before the plan merger, were offered the choice of having their future benefits under the Vectren Plan calculated using either the formula that had applied to them under the traditional SIGECO Plan or the applicable cash balance formula under the Vectren Plan. Plaintiffs, as well as the proposed class, were all required to make their election by June 23, 2000. Plaintiffs chose to have their future benefits calculated under the Vectren Plan's cash balance formula and the results of that choice, they allege, have been financially devastating.
Plaintiffs commenced this action on March 12, 2015, with the filing of the Plaintiffs' Class Action Complaint. In Count I, Plaintiffs allege that the Defendants, Vectren Corporation and the Vectren Plan1 (collectively "Vectren"), breached their fiduciary duties under the Employee Retirement Income Security Act ("ERISA") by: (1) making misleading or false statements in material circulated prior to Plaintiffs' election in 2000 and in Summary Plan Descriptions ("SPDs") issued in 2003 and 2010; (2) omitting material information Plaintiffs needed in order to properly evaluate the risks of the Vectren Plan; and (3) failing to protect Plaintiffs' accrued benefits. In Count II, Plaintiffs allege that Vectren illegally "cut back" their protected benefits in violation of ERISA § 204(g), 29 U.S.C. § 1054(b).
On July 10, 2015, Vectren filed a Motion for Judgment on the Pleadings. Vectren argues that Plaintiffs' breach of fiduciary duty claim is barred by the applicable statute of limitations under ERISA § 413, 29 U.S.C. § 1113. Vectren also argues that Plaintiff's illegal "cut back" claim should be dismissed for two reasons. First, the claim is timebarred by the applicable statute of limitations and second, Plaintiffs fail to state a claim upon which relief can be granted. On March 21, 2016, the court held oral argument.
Having considered the pleadings, the documentary submissions that are a part of the pleadings, and the applicable law, the court finds, at this stage of the proceedings, that Count I should not be dismissed. The statute of limitations argument is a close call, and one more suited for disposition on a motion for summary judgment. See Brownmark Films, LLC v. Comedy Partners, 682 F.3d 687, 690 (7th Cir. 2012) (noting that statute of limitations defenses "typically turn on facts not before the court at th[e] [pleading] stage of the proceedings"); Cancer Found. v. Cerberus Capital Mgmt., 559 F.3d 671, 674 (7th Cir. 2009) ("Dismissing a complaint at the pleading stage is an unusual step, since a complaint need not anticipate and overcome affirmative defenses, such as the statute of limitations.").
With respect to Count II, ERISA's anti-cutback rule provides, "The accrued benefit2 of a participant under a plan may not be decreased by an amendment of the plan. . . ." ERISA § 204(g) (1), 29 U.S.C. § 1054(g)(1). Section 204(g) further provides that "a plan amendment which has the effect of . . . (A) eliminating or reducing an early retirement benefit or a retirement-type subsidy (as defined in regulations), or (B) eliminating an optional form of benefit, with respect to benefits attributable to service before the amendment shall be treated as reducing accrued benefits." Id. § 204(g)(2).
Plaintiffs' claim is based on Vectren's alleged failure to pay them, in addition to their accrued protected benefit, the annual pay credits, annual interest credits, and medical and life insurance credits equal to $310.00 per year, promised to them as part of the cash back formula. But this claim requires a prohibited amendment to a covered plan that decreases the accrued benefit of a participant under the plan. There is no such allegation in the Complaint. Furthermore, in compliance with Section 204(g), the postmerger Vectren Plan expressly preserved Plaintiffs' accrued protected benefit under the SIGECO formula. Section 2.02 of the Plan provides:
[T]he Accrued Protected Benefit of a Member who was a participant in the SIGECO Pension Plan on June 30, 2000 but who is not a Transitional SIGECO Member3 should under no circumstances be less than his Accrued Benefit determined at [sic] June 30, 2000 under the provisions of the SIGECO Pension Plan then in effect.
(Filing No. 43-1 at 6). Thus, the plain language of the post-merger plan expressly preserved all of Plaintiffs' accrued benefits under the SIGECO formula. Count II should therefore be dismissed.
For the reasons set forth above, Vectren's Motion for Judgment on the Pleadings (Filing No. 19) is DENIED on Count I of the Complaint and GRANTED on Count II of the Complaint.
SO ORDERED
