                                                                              [PUBLISH]

                      IN THE UNITED STATES COURT OF APPEALS

                                  FOR THE ELEVENTH CIRCUIT            FILED
                                    ________________________ U.S. COURT OF APPEALS
                                                                     ELEVENTH CIRCUIT
                                            No. 10-14704               MARCH 23, 2012
                                      ________________________           JOHN LEY
                                                                          CLERK
                                D.C. Docket No. 1:09-cv-01739-JOF



JEAN MARIE CINOTTO,
on behalf of herself and all others similarly situated,

lllllllllllllllllllllllllllllllllllllll                          l     Plaintiff-Appellant,


                                                versus


DELTA AIR LINES INC.,
THE ADMINISTRATIVE COMMITTEE,
THE ADMINISTRATIVE SUBCOMMITTEE OF DELTA AIR LINES, INC.,
LISA A. BROWN,
CHERIE CALDWELL, et al.,

llllllllllllllllllllllllllllllllllllllll                             Defendants-Appellees.

                                     ________________________

                           Appeal from the United States District Court
                              for the Northern District of Georgia
                                 ________________________

                                           (March 23, 2012)
Before CARNES and HULL, Circuit Judges, and ROTHSTEIN,* District Judge.

HULL, Circuit Judge:

       This appeal involves the anti-cutback rule in § 204(g) of the Employee

Retirement Income Security Act of 1974 (“ERISA”), codified as 29 U.S.C.

§ 1054(g). Specifically, § 204(g)’s anti-cutback rule forbids, with a few

exceptions, a pension plan amendment that decreases a participant’s “accrued

benefit.” The particular pension plan here has always used a Social Security offset

to reduce a participant’s pension retirement benefits. The narrow question before

us is whether this pension plan amendment violated the anti-cutback rule when it

changed the calculation of that Social Security offset for participants who had not

yet reached age 52, the plan’s earliest retirement age, at the time of the

amendment. We hold that it did not.

                                   I. BACKGROUND

       Although the ERISA issue is complex, the relevant facts are undisputed.

Plaintiff-Appellant Jean Marie Cinotto works as a flight attendant for Defendant-

Appellee Delta Air Lines, Inc. In that capacity, Cinotto has worked for Delta for

approximately thirty years, and still does. She is a participant in Delta’s Family-



       *
         Honorable Barbara Jacobs Rothstein, United States District Judge for the Western
District of Washington, sitting by designation.

                                               2
Care Retirement Plan (“the Plan”), which covers all employees except pilots. The

Plan’s calculation of a participant’s retirement benefit factors in (1) years of

service, (2) earnings at Delta, and (3) an offset for the amount of the participant’s

Social Security benefit. The earliest retirement age under the Plan is age 52.

      On March 31, 2007, the Plan amended its calculation of the Social Security

offset, and on that date, Cinotto had not yet attained age 52. The relevance of

these undisputed facts is explained below.

A.    The Delta Plan: Two Types of Defined Benefits

      The Delta Plan is a “defined benefit” pension plan. The Plan provides two

types of defined benefits: (1) “retirement” benefits under Article Five for

employees who retire directly from Delta, and (2) “termination” or “deferred

vested” (hereinafter “termination”) benefits under Article Six for certain

employees who terminate employment from Delta for any reason other than

retirement or death.

      As to the first type, a Plan participant is eligible to receive retirement

benefits upon attaining age 52. A participant who retires between ages 52 and 65

takes “early retirement,” while a participant who retires at or after age 65 takes

“normal retirement.” If a participant chooses to commence payment of his

benefits between the ages of 52 and 65, his benefits are actuarially reduced. By

                                           3
contrast, if a participant waits until age 65 to commence payment, he receives a

larger benefit amount, or “normal retirement income benefit.” The Plan also states

that “a Participant’s retirement income benefit under the Plan shall become non-

forfeitable no later than the Participant’s Normal Retirement Date.”

      As to the second type of defined benefit, a Plan participant is eligible to

receive “termination” benefits upon (1) completing at least five years of

continuous service or reaching age 52, and (2) then terminating employment for a

reason other than retirement or death. A participant commences receiving

termination benefits similarly to retirement benefits. That is, a participant receives

a larger monthly benefit by waiting to draw benefits until age 65, but if he draws

benefits between the ages of 52 and 65, his monthly benefit is actuarially reduced.

The Plan also states that “if a Participant has a termination of employment” with

Delta “(i) after attaining age 52 or (ii) after completing 5 years of continuous

service, the Participant shall be 100% vested in his or her Accrued Benefit under

this Plan.”

      In both types of defined benefits, the benefit amount is determined using a

Social Security offset, as discussed later.

B.    “Accrued” Benefits

      Because the anti-cutback rule applies only to an accrued benefit, we review

                                              4
the Plan’s definition of an accrued benefit.

        In Article One, the Plan defines the term “Accrued Benefit.” An “Accrued

Benefit” under the Plan “as of any determination date shall be an annual benefit

payable monthly (as determined [under the Plan]) commencing on the

Participant’s Normal Retirement Date, or on the Annuity Starting Date if later.”

As part of this definition of “Accrued Benefit,” the Plan states: “No Participant

shall have an Accrued Benefit based on future or projected service or Earnings

regardless of the use of future dates by the Plan. Such future dates and the result

of projected service on future Earnings on a Participant’s potential retirement

benefit are not part of the Participant’s Accrued Benefit.”

        The Plan defines “Normal Retirement Date” as “the first day of the month

coinciding with or next following the date he or she attains age 65.” “Normal

Retirement Date” is thus tied to being 65. By contrast, the “Annuity Starting

Date” applies to a participant who takes early retirement, which is at or after age

52 but before age 65.1 The “Annuity Starting Date” is defined as “[t]he first day of

the first period for which a retirement benefit is paid as an annuity, or, in the case

        1
           For that early-retirement participant, the Plan states that he “may elect as his . . . Annuity
Starting Date (i) his . . . Early Retirement Date, or (ii) the first day of any month following
his . . . Early Retirement Date up to the date specified in Section 10.13 [of the Plan].” “Early
Retirement Date,” in turn, “is the first day of any month on which the Employee retires from
[Delta], provided that the Employee has attained age 52, but has not attained age 65, when the
Employee so retires.”

                                                    5
of a retirement benefit that is not paid in the form of an annuity, the first day on

which all events have occurred which entitle the Participant to such benefit.”

D.     The Plan’s Benefit Formula

       In addition, a defined benefit pension plan generally provides a formula

whereby a participant can determine what benefit, if any, is payable to him. The

Delta Plan provides such a formula, using the same factors for both retirement and

termination benefits. To determine a participant’s benefit, three factors are used:

(1) a participant’s Final Average Earnings (“FAE”);2 (2) his Primary Social

Security Benefit (“PSSB”);3 and (3) his months-of-credited-service-to-30-years

ratio. The final average earnings benefit is the product of the credited-service

ratio and the difference of 60% of the FAE less 50% of the PSSB. The full

amount of this monthly benefit is payable to participants beginning at age 65;

participants may begin receiving a reduced benefit as early as age 52.

       The deduction of the PSSB is commonly referred to as the “Social Security




       2
        A participant’s FAE is his monthly average earnings, determined by dividing the highest
sum of his earnings in any 36 consecutive calendar months by 36. For example, if a participant’s
highest sum of his earnings during any 36-month period is $117,000, then his FAE equals $3,250
($117,000 ÷ 36).
       3
         A participant’s PSSB is the “monthly old age benefit” available “under the Federal
Social Security Act . . . or under any successor Federal law determined as of the applicable date
and in the manner set forth in [the Plan].”

                                                6
offset.”4 The Plan’s formula for determining the Social Security offset is the

center of this case’s dispute. Delta has amended the formula for the Social

Security offset twice in recent years, in amendments known as Amendments Seven

and Eight. Only Amendment Eight is challenged here. The next sections describe

how the Social Security offset worked before and after each Amendment.

E.     Social Security Offset Formula Prior to Amendment Seven

       Prior to Amendment Seven, the Plan’s methods for determining a

participant’s PSSB—and thereby his Social Security offset—worked as follows.

The Plan separated participants based on whether they had reached age 52 as of

June 30, 2003.

       For a participant age 52 or older on June 30, 2003, the Social Security offset

was “determined by assuming the Participant had no income after June 30, 2003.”

This assumption of no future income meant no future Social Security contribution,

which resulted in a smaller Social Security offset and a larger Plan benefit. As

discussed later, Amendments Seven and Eight to the Plan did not change the “no

income” offset formula for participants age 52 or older on June 30, 2003.



       4
         The Plan states that the Social Security offset “shall not reduce the Participant’s [benefit]
until the earlier of the Participant’s Social Security Retirement Age or the date the Participant
begins receiving social security benefits.” Thus, the Social Security offset does not apply until
the employee is eligible to receive Social Security or begins to receive it.

                                                  7
       However, if a participant had not reached age 52 by June 30, 2003, then the

Plan (prior to Amendments Seven and Eight) determined the Social Security offset

“based on [1] whether the Participant terminates employment with [Delta] before

or after June 30, 2010 and [2] whether the Participant is eligible for a retirement

income benefit . . . or a [termination] benefit.” If that participant terminated

employment before June 30, 2010, and was eligible for a retirement benefit, the

Social Security offset was “determined by assuming the Participant had 2003

Level Pay . . . from July 1, 2003 to the date the Participant attains age 52.” If

instead that participant terminated employment before June 30, 2010, and was

eligible for only a termination benefit, the Social Security offset was “determined

by assuming the Participant had 2003 Level Pay until the Participant attained age

65.”

       If a participant terminated employment after June 30, 2010, the Plan

provided that, regardless of whether the participant is eligible for a retirement or

termination benefit, the Social Security offset was “determined by assuming the

Participant had no income after the earlier of the date the Participant attains age 52

or June 30, 2010.”

F.     Amendment Seven, Effective December 31, 2005

       On December 31, 2005, Amendment Seven to the Plan became effective.

                                           8
The Amendment made two primary changes: (1) a freeze of benefit accruals, and

(2) a modification of the Social Security offset for participants under age 52 on

June 30, 2003.

      By virtue of Amendment Seven, the amended Introduction to the Plan

provided that “[e]ffective December 31, 2005, all benefits under the Plan are

frozen for all Participants and there shall be no further accruals of benefits under

this plan after that date.” Amendment Seven also added this language to the end

of the Plan’s definition of “Accrued Benefit”: “A Participant shall not accrue any

additional benefits under the Plan after December 31, 2005.” This meant that a

participant’s FAE period ended and would be calculated as of December 31, 2005,

and his months of credited service ended as of December 31, 2005. Although a

participant continued to work for Delta, no additional months of service or

earnings would be taken into account in calculating either his retirement or

termination benefit under the Plan.

      The amended Social Security offset formula continued to separate

participants based on whether they had attained age 52 on June 30, 2003.

Amendment Seven, however, did away with the distinction between participants

retiring before and after June 30, 2010. For a participant age 52 or older as of

June 30, 2003, the Plan left intact the “no income” formula and provided that the

                                          9
Social Security offset would be “determined by assuming the Participant had no

income after June 30, 2003.”

      For a participant under age 52 as of June 30, 2003, the Plan provided that,

effective December 31, 2005, the Social Security offset would depend on whether

that participant later became eligible for (1) a retirement benefit under Article Five

or (2) a termination benefit under Article Six. In other words, the amount of the

Social Security offset hinged on whether a participant (1) continued to work at

Delta, retired directly from Delta, and received a retirement benefit, or (2)

terminated employment with Delta prior to retirement and received a termination

benefit.

      As to a retirement benefit, and if a participant had reached age 52 by

December 31, 2005, his Social Security offset was determined by “assuming the

Participant had 2003 Level Pay . . . from July 1, 2003 to the date the participant

attains age 52 and no pay thereafter.”

      As to a retirement benefit, and if a participant had not attained age 52 by

December 31, 2005, his Social Security offset was determined by “assuming . . .

2003 Level Pay from July 1, 2003 to December 31, 2005 and no pay thereafter.”

When Amendment Seven became effective on December 31, 2005, plaintiff

Cinotto had not turned 52 and thus was not yet eligible for a retirement benefit.

                                          10
Under Amendment Seven, if Cinotto continued to work at Delta and later became

eligible for a retirement benefit, Cinotto’s Social Security offset would have been

calculated using her 2003 level pay from July 1, 2003, to December 31, 2005.

      To calculate a termination benefit under Article Six, the Plan determined the

Social Security offset “by assuming the Participant had 2003 Level Pay until the

Participant attained age 65.”

G.    Amendment Eight, Effective March 31, 2007

      Two years later, Delta again amended the Plan, effective March 31, 2007.

Amendment Eight modified who was eligible for the favorable Social Security

offset, but left intact the benefit accrual freeze. At the time Amendment Eight

went into effect, Cinotto was still under age 52 and still employed by Delta.

      Amendment Eight continued to distinguish between participants age 52 and

older and those under age 52. Amendment Eight grandfathered in participants

who had already reached age 52 by its enactment date, maintaining the status quo

that had existed for them under the Plan.

      But for a participant, such as Cinotto, who had not reached age 52 as of

March 31, 2007, Amendment Eight changed the rules. Regardless of whether a

participant was eligible for a retirement benefit under Article Five or a termination

benefit under Article Six, he would not receive the favorable Social Security

                                         11
offset. Instead, the offset would be “determined by assuming the Participant had

2003 Level Pay until the Participant attains age 65.”

      In summary, Amendment Eight did not affect the Social Security offset

calculation of (1) an employee who terminated employment prior to age 52 and

thus received a termination benefit or (2) an employee who had already reached

age 52 by March 31, 2007, and thus was eligible for a retirement benefit prior to

Amendment Eight. Rather, Amendment Eight changed the calculation of the

Social Security offset for only an employee who was under age 52 on March 31,

2007, (the effective date of Amendment Eight) and not yet eligible for a retirement

benefit but who subsequently continued to work for Delta until age 52 and then

became eligible for a retirement benefit. Amendment Eight eliminated the

possibility that an under-age-52 participant could decrease his Social Security

offset (and thereby increase his future retirement benefit) by continuing to work at

Delta past age 52 and becoming eligible for a retirement benefit under Amendment

Seven’s more favorable offset formula (i.e., of 2003 level pay to December 31,

2005, and no pay thereafter).

      As Delta explained in its notice of Amendment Eight’s changes sent to

participants: If a participant ultimately receives a termination benefit, the

participant’s benefit remains the same as it would have been under Amendment

                                          12
Seven. However, if a participant ultimately receives a retirement benefit, the

participant’s benefit decreases from what it would have been under Amendment

Seven.

H.     District Court Proceedings

       In June 2009, Cinotto filed a proposed class action complaint against Delta,

alleging, inter alia, that Amendment Eight violated ERISA’s anti-cutback rule.

Delta moved to dismiss the complaint under Federal Rule of Civil Procedure

12(b)(6). The district court granted Delta’s motion.5

       In its thorough opinion, the district court concluded that Amendment Eight,

on its face, does not violate ERISA’s anti-cutback rule. The court reasoned that

the amended Social Security offset calculation for a retirement benefit was a

separate benefit that did not accrue until a participant reached age 52 and thus

Cinotto, who was under age 52 at the time of Amendment Eight, did not have an

“accrued benefit” affected by Amendment Eight. Further, the district court noted

that the anti-cutback rule did not protect a “future benefit expectation” based on

“potential future service.”

       Cinotto then brought this appeal.



       5
        On appeal, Cinotto does not challenge the district court’s rulings regarding her fiduciary
duty, co-fiduciary duty, or notice claims. Thus, we discuss only her anti-cutback rule claim.

                                                13
                            II. STANDARD OF REVIEW

       We review de novo the district court’s grant of a Rule 12(b)(6) motion to

dismiss for failure to state a claim, accepting the complaint’s allegations as true

and construing them in the light most favorable to the plaintiff. Harris v. United

Auto. Ins. Grp., Inc., 579 F.3d 1227, 1230 (11th Cir. 2009).

                                    III. DISCUSSION

A.     ERISA’s Anti-Cutback Rule

       ERISA’s anti-cutback rule limits a pension plan’s ability to decrease a

participant’s accrued benefits. The rule provides, with few exceptions, that “[t]he

accrued benefit of a participant under a plan may not be decreased by an

amendment of the plan.”6 29 U.S.C. § 1054(g)(1)–(2).

       Cinotto contends that Amendment Eight violated ERISA’s anti-cutback rule

because it decreased her accrued pension benefits by eliminating the more

favorable Social Security offset for retirement benefits. Delta responds that

Amendment Eight did not violate the anti-cutback rule because the Amendment

affected only future accruals for persons under age 52. That is, Delta argues that a



       6
        ERISA circuitously defines “accrued benefit” as an “accrued benefit determined under
the [pension] plan and . . . expressed in the form of an annual benefit commencing at normal
retirement age.” 29 U.S.C. § 1002(23)(A). Thus, ERISA looks to what is an accrued benefit
determined under the Plan. Accordingly, we focus on the Plan documents.

                                              14
participant did not accrue the more favorable Social Security offset formula until

reaching age 52, and Cinotto was under 52 and not even eligible for a retirement

benefit when Amendment Eight became effective. Before analyzing the merits of

Cinotto’s claim, we review the three most relevant decisions relied on by the

parties. These decisions help us discern what is an accrued benefit for purposes of

the anti-cutback rule versus a future benefit accrual or a vesting requirement not

subject to the rule.

B.    Central Laborers’ Pension Fund v. Heinz

      We start with the Supreme Court’s decision in Central Laborers’ Pension

Fund v. Heinz, 541 U.S. 739, 124 S. Ct. 2230 (2004), because Cinotto relies so

heavily on it. In Heinz, the plaintiff, a retired construction worker, had been

receiving benefits under a defined benefit “service only” pension plan

administered by the defendant. Id. at 741, 124 S. Ct. at 2234. The pension plan

contained the following condition: if a retired participant, receiving monthly

payments under the service only pension, subsequently accepted “certain

‘disqualifying employment,’” then his monthly payments would be suspended as

long as he continued in that employment. Id. at 742, 124 S. Ct. at 2234.

      When the plaintiff retired, he took an employment position that was

permitted under the terms of the plan’s condition. Id. Two years later, however,

                                         15
the plan amended the condition’s terms by expanding the list of disqualifying

employment to include the plaintiff’s post-retirement position. Id. Accordingly,

the defendant deemed the condition triggered and suspended the payment of the

plaintiff’s monthly benefits. Id. The plaintiff then sued, arguing that the

amendment reduced the value of his accrued benefits and thereby violated

ERISA’s anti-cutback rule. Id. at 742-43, 124 S. Ct. at 2234-35.

       In assessing the plaintiff’s claim, the Supreme Court noted some general

principles about benefit accrual. The Supreme Court defined benefit accrual as

“the rate at which an employee earns benefits to put in his pension account.”7 Id.

at 749, 124 S. Ct. at 2238. Distinguishing between an accrued benefit and a future

benefit accrual, the Supreme Court made clear that a pension plan may be

amended, “as long as the change goes to the terms of compensation for continued,

future employment.” Id. at 747, 124 S. Ct. at 2237. The Supreme Court also

observed that the anti-cutback rule did not apply to a “vested” benefit, because

“vesting” is essentially a point in time: that is, when an employee has an

irrevocable right to his accrued benefit “by virtue of . . . fulfill[ing] age and length


       7
         ERISA requires a plan’s accrual formula to establish one of three rules governing
minimum accrual rates. In brief, the rules are the “3 percent,” the “133 and 1/3 percent,” and the
“fractional” methods. 29 U.S.C. § 1054(b)(1)(A)–(C). For all, “social security benefits and all
other relevant factors used to compute benefits shall be treated as remaining constant as of the
current year for all years after such current year.” Id.

                                                16
of service requirements.”8 Id. at 749, 124 S. Ct. at 2238; see also 29 U.S.C.

§ 1002(19) (defining the term “nonforfeitable,” which ERISA uses

interchangeably with “vested,” as “a claim obtained by a participant . . . to that

part of an immediate or deferred benefit under a pension plan which arises from

the participant’s service, which is unconditional, and which is legally enforceable

against the plan”).

       In Heinz, the Supreme Court concluded that the employment condition was

an “element[] of the benefit itself and [is] considered in valuing it at the moment it

accrues.” Id. at 746, 124 S. Ct. at 2236 (emphasis added). That conclusion was

supported by Internal Revenue Service regulations9 establishing that the anti-

cutback rule “flatly prohibits plans from attaching new conditions to benefits that

an employee has already earned.” Id. at 747, 124 S. Ct. at 2237. Under the facts

of the case, the plaintiff had already retired and was receiving accrued benefits

when the plan’s amendment subsequently expanded the terms of the original

condition (i.e., expanded the list of disallowed employment); therefore, the

amendment “shr[ank] the value of [the retiree’s] pension rights” and violated the

       8
       Although the anti-cutback rule does not address vested benefits, the Internal Revenue
Code does restrict permissible amendments to vesting requirements. See 26 U.S.C. § 411(a)(10).
       9
        The Supreme Court stated that Internal Revenue Code provisions concerning the I.R.C.
version of the anti-cutback rule apply with “equal force” to ERISA’s anti-cutback rule. Cent.
Laborers’ Pension Fund v. Heinz, 541 U.S. 739, 747, 124 S. Ct. 2230, 2237 (2004).

                                              17
anti-cutback rule.10 Id. at 744, 124 S. Ct. at 2236.

       Contrary to Cinotto’s contention, Heinz does not help her because of the

materially different situation faced by the Supreme Court in that case. Unlike

Cinotto, the plaintiff-employee had already retired and was receiving benefits, and

the plan amendment in Heinz affected the employee’s receipt of undeniably

accrued benefits. What the parties disagreed about in Heinz was whether the

forbidden-employment condition, which affected the potential suspension of

payment of a plaintiff’s accrued benefits after his retirement, was part of those

accrued benefits.

       Heinz’s reasoning is therefore directed toward a situation distinguishable

from here, where no condition threatens to suspend current payment of accrued

benefits. Rather, the disputed amendment in this case altered how the Social

Security offset for a potential retirement benefit would be calculated, but only for

a participant not yet eligible for that retirement benefit. The offset, however, had

and has no effect on whether a participant’s current receipt of benefits will be

suspended by a participant’s action. Put another way, the offset is not a condition,


       10
         Four Justices concurred, observing that they did not read the Heinz opinion to
“foreclose a reading” of ERISA permitting the Secretary of Labor or the Secretary of the
Treasury to issue regulations approving plan amendments similar to the one found by the
Supreme Court to be a violation of the anti-cutback rule. 541 U.S. at 751, 124 S. Ct. at 2239
(Breyer, J., concurring).

                                               18
such as in Heinz, that places limitations on whether Cinotto may receive a benefit,

or after receiving a benefit, whether its payment will be suspended. The Social

Security offset is simply a “term[] of compensation for continued, future

employment.” Id. at 747, 124 S. Ct. at 2237. These differences wholly distinguish

this case from Heinz.

C.    Gilley v. Monsanto Co.

      The next case, Gilley v. Monsanto Co., 490 F.3d 848 (11th Cir. 2007), does

not assist Cinotto much either, as it concerns a vesting, rather than accrual,

requirement. In Gilley, this Court considered the differences between accrued and

vested benefits in addressing the plaintiff’s claim that the defendant’s amendment

to its pension plan violated the anti-cutback rule. 490 F.3d at 858. The plaintiff

had worked at one of the defendant’s plants for almost nine-and-a-half years when

the plant closed. Id. at 852. During that time, the plaintiff was enrolled in the

defendant’s pension plan, which had the following vesting requirements: “(1) an

eligible employee must reach retirement age, and (2) the employee must acquire at

least ten years of ‘Vested Service.’” Id. A year of vested service equaled 1,000

hours of service completed during that year. Id. The plan provided a formula for

calculating the hours of service. Id.

      When the plaintiff’s employment was terminated, a formula called the “95-

                                          19
Hour Rule” was used to calculate the hours of service. Id. at 853. The 95-Hour

Rule had not been in place when the plaintiff began employment, however. Id.

The 95-Hour Rule did not credit hours of service based on actual hours worked,

but credited employees with 95 hours of service every two weeks. Id. The 95-

Hour Rule excluded additional credit for overtime hours, embodying the

assumption that even with a 40-hour week, 15 extra hours credited on a bi-weekly

basis was a fair way to account for any overtime hours worked. Id.

      After the plaintiff was terminated, he applied for but was denied pension

benefits under the plan. Id. The defendant denied the pension benefits because,

under the 95-Hour Rule, the plaintiff had worked only 9.594 years and thus not

acquired the necessary years of vested service. Id. The plaintiff then sued and

won in the district court. Id. at 855. In response to the defendant’s appeal, the

plaintiff argued, inter alia, that the defendant’s adoption of the 95-Hour Rule

violated ERISA’s anti-cutback rule because it was adopted after the plaintiff began

employment. Id. at 858.

      In Gilley, this Court reversed, reasoning that the 95-Hour Rule amendment

“affected [the plaintiff’s] ability to vest before he had vested, but it did not reduce

the amount of his accrued benefit or the rate at which he was accruing benefits.”

Id. at 859. We explained that the anti-cutback rule, by its own terms, forbids only

                                           20
cutbacks on accrued benefits, and “[t]here is a difference between ‘accrued

benefits’ and ‘vested benefits.’” Id. at 858. After discussing the difference

between vesting and accrual, this Court noted that the 95-Hour Rule did not affect

the amount of the plaintiff’s pension but only whether he met the ten-year

requirement for vesting. Id. Because the amendment did not change his accrued

benefits, the anti-cutback rule was not applicable. Id.

D.    Blessitt v. Retirement Plan for Employees of Dixie Engine Co.

      Although not an anti-cutback rule case, our decision in Blessitt v.

Retirement Plan for Employees of Dixie Engine Co., 848 F.2d 1164 (11th Cir.

1988) (en banc), is informative because it discusses accrued benefits and how they

differ from anticipated benefits based on future years of service. Like Heinz and

Gilley, however, the case does not help Cinotto.

      The plaintiffs in Blessitt were enrolled in the defendant’s pension plan but

had not reached normal retirement age and were not yet retirement-eligible when

the plan terminated. Id. at 1165. Accordingly, the defendant calculated the

plaintiffs’ pension benefits under the plan’s termination formula, rather than the

more favorable retirement formula. Id. Reaching normal retirement age (65) was

a “prerequisite for qualifying for [the retirement] benefits.” Id. at 1169. The

plaintiffs brought suit, claiming that their pension benefits should have been

                                         21
calculated under the retirement formula and that the defendant’s calculation

violated ERISA’s termination scheme, codified at 29 U.S.C. § 1344. Id. at 1166,

1168.

        In Blessitt, this Court concluded that a pension plan participant is not

entitled to a benefit “calculated on the basis of anticipated future years of service

which have not actually been worked as of the termination date.” Id. at 1165. In

rejecting the plaintiffs’ claims, this Court noted that ERISA’s “essential purpose”

is to ensure that employees received their accrued benefits, but not to give them

“something for nothing.” Id. at 1176. Due to the plan’s termination, the plaintiffs

would never be able to work the necessary years to vest in retirement benefits and

were therefore eligible only for termination benefits. Id. at 1174-76. This Court

cited multiple cases concluding “that benefit accruals cease when the plan

terminates.” Id. at 1173. Indeed, “[n]o case has ever held that, when a defined

benefit plan terminates, an employer is required to pay an employee retirement

benefits based on future years of service not yet worked.” Id. at 1172; see also

Aldridge v. Lily-Tulip, Inc. Salary Plan Benefits Comm., 40 F.3d 1202, 1211

(11th Cir. 1994) (holding that the anti-cutback rule applied to both amendments to

the plan and termination of the plan, but also stating that “[a]lthough the

amendments may have reduced accrued benefits with respect to pre-amendment

                                           22
service, the termination of the Plan only eliminated future benefit accrual,” and

concluding termination did not violate the anti-cutback rule).

      Before discussing Cinotto’s arguments, we also review how pension plans

may lawfully integrate pensions with Social Security benefits.

E.    Pension Plan Integration with Social Security Benefits

      The Delta Plan benefit formula uses a Social Security offset to calculate a

participant’s pension benefit. ERISA expressly permits this type of offset, under a

calculation practice known as “integration.” See Alessi v. Raybestos-Manhattan,

Inc., 451 U.S. 504, 514, 101 S. Ct. 1895, 1902 (1981). Integration discounts or

“offsets” a participant’s pension benefit with certain types of non-plan benefits,

such as Social Security. 29 U.S.C. § 1056(b) (allowing plan to decrease plan

benefits as long as the participant is not receiving benefits under the plan and does

not otherwise have nonforfeitable rights to benefits); see also 26 U.S.C.

§ 401(l)(3)(B) (providing permissible offset formulas); Holliday v. Xerox Corp.,

732 F.2d 548, 551 (6th Cir. 1984) (“[ERISA] itself establishes that it is

permissible for a pension plan to provide for the offset of social security

benefits.”). Because an employer funds half of an employee’s Social Security

benefits, integration is viewed as appropriate, despite its reduction of pension

benefits. See 26 C.F.R. § 1.401-3(e)(2)(i)(C).

                                          23
      Indeed, Congress recognized that the integration of Social Security benefits

would reduce a participant’s ultimate pension benefit, but nonetheless permitted

the practice. See Alessi, 451 U.S. at 515, 101 S. Ct. at 1902; see also 29 U.S.C.

§ 1056(b). A congressional report notes ERISA’s codification of then-current

integration practice, as follows:

             Protection is given to retired individuals and individuals who are
      separated from the service of the employer against reductions in private
      plan benefits when social security benefit levels increase. In general,
      under present integration procedures, social security benefits attributable
      to employer contributions are treated as though they were part of the
      private plan. As a result when the level of social security benefits
      increases, some integrated plans have reduced the amount of the
      retirement benefits that they provide for covered employees.

             Present law under administrative practice provides that qualified
      plans may not use increases in social security benefit levels to reduce the
      benefits that they pay where the employees concerned are retired and are
      already receiving integrated plan benefits. The bill codifies this
      treatment for retired persons. It also extends the prohibition against
      reducing plan benefits where social security benefit levels are increased
      to cases where the individuals concerned are separated from service
      prior to retirement and have deferred nonforfeitable rights to plan
      benefits. This provision is effective for increases in social security
      benefits which take place after the date of enactment or on the date of
      the first receipt of plan benefits or the date of separation from service
      (whichever is applicable) if that date is later.

            These changes do not affect the ability of plans to use the
      integration procedures to reduce the benefits that they pay to individuals
      who are currently covered when social security benefits are liberalized.

H.R. Rep. No. 93-807 (1974), reprinted in 1974 U.S.C.C.A.N. 4670, 4695-96.

                                          24
      Prior to 1986, a pension plan could use as much as 83.33% of a participant’s

Social Security benefit as an offset against his accrued pension benefit. Rev. Rul.

71-446, 1971-2 C.B. 187. However, in 1986 Congress passed the Tax Reform Act

of 1986, Pub. L. No. 99-514, 100 Stat. 2085 (codified as amended in scattered

sections of 26 U.S.C.), which reduced the permissible offset percentage. Tax

Reform Act, § 1111. Now, any offset must comply with the complex rules set

forth in the Internal Revenue Code. 26 U.S.C. § 401(l)(3)(B). There is no claim

here that Delta’s Amendment violates these IRS or other rules. The only issue is

whether it violates the anti-cutback rule.

F.    Amendment Eight Does Not Violate ERISA’s Anti-Cutback Rule

      With this background, we more easily assess whether Amendment Eight

violates ERISA’s anti-cutback rule. To this end, it is important first to demarcate

what Amendment Eight could not do. Because of Amendment Seven’s accrual

freeze, Amendment Eight could not affect future benefit accruals resulting from

pay and service increases. There were none after 2005. Further, Amendment

Eight could not reduce Cinotto’s accrued benefit. The statute expressly forbids it.

29 U.S.C. § 1054(g). Thus, the dispositive issue here is whether Cinotto’s accrued

benefit included the right to Amendment Seven’s more favorable Social Security

offset—i.e., was the more favorable offset a “benefit,” and if so, had Cinotto

                                             25
“accrued” it?

      We need not answer the “benefit” inquiry because the answer to the

“accrual” question alone resolves the case. Even assuming a lower Social Security

offset is a benefit, we conclude that Cinotto had not accrued this benefit at the

time Amendment Eight went into effect. While the Plan arguably gave a

participant a right to a certain offset formula upon reaching age 52 and becoming

entitled to a retirement benefit, that right was dependent upon future service. In

the Plan’s own definition of “Accrued Benefit,” it states: “No Participant shall

have an Accrued Benefit based on future or projected service or Earnings

regardless of the use of future dates by the Plan.” Both the day before and the day

after Amendment Eight, the lower Social Security offset for a retirement benefit

had not become part of Cinotto’s accrued benefit because she was under age 52

and depended on future employment with Delta to become eligible for a retirement

benefit. Under Amendment Seven, Cinotto expected that if she continued to work

at Delta and retired from Delta after reaching age 52, the Plan would estimate her

Social Security benefits by assuming “no pay” after December 31, 2005. That did

not mean the retirement formula using that particular offset was part of her

accrued benefit.

      This becomes clear by examining when the offset would become an accrued

                                          26
benefit. The key to identifying an accrued benefit at a specific point—here the

March 31, 2007 date of Amendment Eight—is to calculate what benefit a

participant—here Cinotto—would be entitled to under the Plan if the participant

ceased employment at that time. If Cinotto had ceased employment on March 31,

2007, the effective date of Amendment Eight, she would not have been entitled to

the Social Security offset for those age 52 or over—i.e., eligible for retirement

benefits—because she was under age 52. As an under-age-52 participant,

Cinotto’s ability to obtain the retirement-age offset was entirely dependent on her

providing future service to Delta at least until age 52. Thus, Cinotto had not yet

accrued a right to the more favorable offset, and consequently, a more favorable

end benefit. Rather, Cinotto had at most an expectation of a future accrual.

Where the right to future benefit accruals are contingent on additional service,

such future increases are not presently accrued benefits. Put another way, a plan

may freely amend how benefits are accrued in the future (or even end their

accrual) so long as the amendment “goes to the terms of compensation for

continued, future employment.” Heinz, 541 U.S. at 747, 124 S. Ct. at 2237.

      Although not cited by the parties, our decision in Blank v. Bethlehem Steel

Corp., 926 F.2d 1090 (11th Cir. 1991), supports our conclusion. In Blank,

employees sued their ex-employer and its pension plan for a retirement benefit.

                                         27
Id. at 1092. The plan allowed employees who met certain age and service

requirements a special benefit if one of two conditions occurred: (1) the

employees’ continuous service was broken due to a layoff or disability; or (2)

continuous service was not broken but the employees were “absent from work by

reason of a layoff resulting from his election to be placed on layoff status as a

result of a permanent shutdown of a plant, department or subdivision thereof.” Id.

The employees met the age and service requirements; however, neither of the two

other conditions occurred at the moment the employees sought the benefit, based

on the plan’s terms. Id. Therefore, the district court granted summary judgment

for the defendants “finding that the benefit was not accrued within the meaning of

ERISA.” Id. This Court held that the district court “correctly applied the relevant

law” regarding the ERISA issue, and we “adopt[ed] its reasoning.” Id. at 1093. In

the same manner, in the present case, Cinotto did not meet the conditions for the

preferential Social Security offset because she had not reached age 52 while

employed with Delta, so that benefit was not accrued.

      We also note in closing a separate section of ERISA, 29 U.S.C. § 1056(b),

that, although not directly implicated by our conclusion, supports our conclusion

too. That section states:

      If (1) a participant or beneficiary is receiving benefits under a pension

                                      28
       plan, or (2) a participant is separated from the service and has non-
       forfeitable rights to benefits, a plan may not decrease benefits of such a
       participant by reason of any increase in the benefit levels payable under
       title II of the Social Security Act . . . if such increase takes place after
       September 2, 1974, or (if later) the earlier of the date of first entitlement
       of such benefits or the date of such separation.

29 U.S.C. § 1056(b). In that provision, Congress prohibited a decrease in a

participant’s pension benefit due to increased Social Security benefit levels, but

only for a nonforfeitable pension benefit, or where the participant “is receiving [a]

benefit[].” In contrast, here, Amendment Eight modified how a pre-retirement age

participant’s Social Security benefit would be estimated, but only for purposes of

integration with a future, and as-yet forfeitable, retirement benefit.

       Simply put, Amendment Eight does not come within the scope of ERISA’s

anti-cutback rule. The anti-cutback rule protects only an accrued benefit from

being reduced by plan amendment. Cinotto had an expectation for how the Social

Security offset would work if she continued to work until age 52 and then retired

from Delta, but only that. The anti-cutback rule does not protect a mere

expectation based on anticipated years of future employment. Accordingly, we

affirm the district court’s dismissal of Cinotto’s claim under Federal Rule of Civil

Procedure 12(b)(6).11


       11
         We recognize that in its brief Delta asserts that it adopted Amendment Eight in response
to the Pension Protection Act, Pub. L. No. 109-280, 120 Stat. 780, passed by Congress in 2006.

                                               29
       AFFIRMED.




Delta states that the Act, which was to assist financially distressed airlines, required it to freeze
all benefit accruals to qualify for funding relief under the Act. Because we conclude that Cinotto
does not prevail under the Plan documents, we need not address any issue raised by Delta’s
contentions regarding the Pension Protection Act.

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