Miller v. Xerox Corp. Retirement Income Guarantee Plan

AMENDED OPINION

OPINION

This appeal presents the question of whether a procedure used by Xerox Corporation (“Xerox”) to reduce pension benefits at final retirement to account for earlier benefit distributions violates the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq. We conclude that Xerox’s method violates ERISA, because it impermissibly reduces pension benefits by more than the accrued pension benefit attributable to the earlier distributions.

I

The facts of the case are undisputed. Plaintiffs Waldamar Miller, Thomas H. Sudduth, Jr., and J. Denton Allen (“the Employees”), all worked for Xerox for many years, received lump sum pension payouts when they left employment in 1983, and returned to work at the company several years later.

During their initial employment with Xerox, the Employees participated in two company retirement plans: the Xerox Retirement Income Guarantee Plan and the Xerox Profit Sharing Plan. The Income Guarantee Plan, a traditional defined benefit pension plan, provided participants with a certain percent of their salary in retirement for each year of service at Xerox, according to a specified formula (“Income…