11th Circuit Rules that Modification of a Pension Plan?ÇÖs Social Security Offset Did Not Violate the Anti-Cut Back Rule

On March 23, 2012, the Federal Court of Appeals for the Eleventh Circuit held that Delta Airlines Inc. did not violate ERISA?ÇÖs anti-cutback rule when it amended its pension plan to change the formula for calculating a Social Security benefit offset for plan participants who were under age 52 (the plan?ÇÖs earliest retirement age). The plan?ÇÖs benefit formula, which was in dispute, ?Ç£integrated?Ç¥ with Social Security by providing an offset to the plan?ÇÖs accrued benefit once a participant reached age 52. In ruling that the amendment did not violate the anti-cutback rule, the court held that the amendment did not reduce the participant?ÇÖs accrued retirement benefit (the accrued retirement benefits had been frozen earlier), but altered how the plan would calculate the Social Security offset for that accrued benefit. Since the amendment only altered the offset formula for participants who were not yet 52, application of the formula depended on future services. As such, the offset was not yet accrued for those under 52 but was an expectation of a future accrual. Accordingly, the amendment did not violate the anti-cutback rule. Cinotto v. Delta Air Lines Inc., No. 10-14704 (11th Cir. March 23, 2012).