The 8th U.S. Circuit Court of
Appeals has agreed with a lower court that participants in the
Anheuser-Busch salaried employee pension plan are entitled to enhanced
pension benefits under Section 19.11(f) of the plan, but disagreed with
the lower court that no calculation of benefits due was necessary.
According to the appellate court’s opinion,
Section 19.11(f) of the Anheuser-Busch Companies Pension Plan provides
for an enhanced pension benefit for a plan participant “whose employment
with the Controlled Group is involuntarily terminated within three (3)
years after the Change in Control.” It does so by adding “an additional
five (5) years” to the participant’s “Credited Service” for purposes of
calculating the participant’s benefits.
In November 2008,
Anheuser-Busch InBev, N.V. combined the Anheuser-Busch Companies. The
parties in the case agree the transaction resulted in a “change of
control” under the plan. As a subsidiary, BEC was a member of the
Anheuser-Busch family of Companies, defined under the plan as the
“controlled group.” At some point in the following year, InBev announced
it was selling BEC to Blackstone Capital Partners V.L.P., to be
finalized on December 1, 2009.
In September 2012, participants in
the plan brought claims to Anheuser-Busch for enhanced pension
benefits. They contended a change in control occurred when InBev
combined Anheuser-Busch Companies, that they were involuntarily
terminated from employment with the controlled group when InBev sold
BEC, and that they were entitled to enhanced benefits under Section
19.11(f) of the plan.
The Anheuser-Busch retirement plan
administrator denied the claims. The plan administrator stated the
“purpose for the special benefits under Section 19.11(f) is to provide
additional benefits to individuals who are out of work after they
involuntarily lose their employment within three years after a change in
control of Anheuser-Busch Companies.” According to the plan
administrator, eligibility for enhanced benefits under Section 19.11(f)
required “an actual break in an individual’s employment, rather than
simply a change in the owner of the entity employing the individual
during a period of continuous employment.” Plaintiffs appealed the
denials of benefits to the Pension Plans Appeals Committee, which upheld
the decisions. They then filed a class action lawsuit to obtain
enhanced benefits under the plan. NEXT: Was the district court’s decision final?