                              In the

United States Court of Appeals
               For the Seventh Circuit

No. 07-2673

V ITO C ONTILLI,
                                                  Plaintiff-Appellant,
                                  v.

L OCAL 705 INTERNATIONAL B ROTHERHOOD OF
T EAMSTERS P ENSION F UND and L OCAL 705
INTERNATIONAL B ROTHERHOOD OF T EAMSTERS
H EALTH AND W ELFARE F UND,
                                    Defendants-Appellees.


             Appeal from the United States District Court
        for the Northern District of Illinois, Eastern Division.
                No. 05 C 0080—James B. Zagel, Judge.



    A RGUED F EBRUARY 12, 2008—D ECIDED M ARCH 23, 2009




  Before E ASTERBROOK, Chief Judge, and R IPPLE and
R OVNER, Circuit Judges.
  E ASTERBROOK, Chief Judge. “Each pension plan shall
provide that an employee’s right to his normal retirement
benefit is nonforfeitable upon the attainment of normal
retirement age”. 29 U.S.C. §1053(a). Vito Contilli turned
65, the “normal retirement age” of the Teamsters Local 705
2                                                No. 07-2673

Pension Fund, on August 30, 1995. He retired in
October 1997 and applied for retirement benefits in
January 1998. The Fund approved his application and in
February 1998 started paying him a monthly pension of
$2,623.50. It did not pay Contilli anything for the post-
retirement months of November and December 1997 and
January 1998, nor did it increase his monthly benefit so
that the actuarial value of the pension starting in
February 1998 was equivalent to that of a pension
starting in November 1997.
  Contilli contends in this suit under 29 U.S.C. §1132(a)(1)
that the Fund’s failure either to start his pension in Novem-
ber 1997, or to increase the monthly benefit so that his
pension has the same value as if payment had begun
in November 1997, violates the non-forfeiture rule of
§1053(a), a part of the Employee Retirement Income
Security Act (ERISA). The district court held, however,
that a plan is entitled to adopt and enforce a rule re-
quiring retirees to apply for their pensions. As the Fund
simply applied to Contilli a generally applicable rule, no
forfeiture occurred.
  Because a rule about the way in which pension benefits
are calculated when an application is deferred affects
many thousands of workers, we asked the United States
to file a brief as amicus curiae. That brief tells us that
an actuarial adjustment of benefits is essential to avoid a
forfeiture, when payment does not begin immediately
after retirement. See 29 U.S.C. §1054(c)(3); 26 U.S.C.
§411(c)(3); 26 C.F.R. §1.411(a)–7(a)(1)(ii), 1.411(c)–1(e)(1).
(These regulations, though issued under a tax statute,
No. 07-2673                                                3

also apply to the cognate portions of ERISA as a result
of a delegation from the Department of Labor to the
Department of the Treasury. See 29 U.S.C. §1202(c); 29
C.F.R. §2530.200a–2; Reorganization Plan No. 4 of 1978,
§101, 43 Fed. Reg. 47713.) We agree with this conclusion
and therefore reverse the district court’s decision.
  A right is non-forfeitable under §1053(a) if “it is an
unconditional right.” 26 C.F.R. §1.411(a)–4(a). Requiring
an application for benefits is a condition on the re-
ceipt of payment, and so it works a forfeiture of the pre-
application benefits unless an actuarial adjustment is
made for months that have been lost. See Cotter v. Eastern
Conference of Teamsters Retirement Plan, 898 F.2d 424, 428
(4th Cir. 1990). ERISA and the implementing regulations
recognize that payment of benefits often will be deferred;
there is no problem with an application requirement. But
the payments skipped as a result of the deferral must be
made up, either by payment (with interest) once the
deferral ends, or by a suitable actuarial adjustment to the
ongoing benefits; otherwise the value of the pension is
lower than one that begins on the normal retirement
date, and a reduction in the total value of all monthly
benefits is a kind of forfeiture. See Berger v. Xerox Corp.
Retirement Income Guarantee Plan, 338 F.3d 755, 759 (7th Cir.
2003); Esden v. Bank of Boston, 229 F.3d 154, 163 (2d Cir.
2000).
  There is an exception to the actuarial-adjustment re-
quirement for a participant who puts off retirement
while continuing to work. See 29 U.S.C. §1053(a)(3)(B).
So the Fund was entitled to start Contilli’s pension in
4                                              No. 07-2673

November 1997, when he retired, rather than in
September 1995, the month after his 65th birthday; it did
not need to send him catch-up checks for those two
years or make any adjustment other than what the plan
itself required. (The Fund is a standard defined-benefit
plan. A pension depends on the number of years of
credited service, so extra months of work automatically
yield a higher monthly pension.) But once Contilli
retired his entitlement was fixed, and the Fund’s failure
to pay any month’s benefit worked a forfeiture of that
amount.
  The Fund does not have an answer to this point. Instead
it seems to have confused the anti-forfeiture rule in
§1053(a) with the anti-cutback rule in 29 U.S.C. §1054(g).
The anti-cutback rule provides that, once a participant’s
right to a benefit has vested, the terms of a pension plan
cannot be changed to reduce the amount of that benefit.
See Central Laborers’ Pension Fund v. Heinz, 541 U.S. 739
(2004). The Fund observes that its rule requiring an ap-
plication for pension benefits, and starting benefits only
after an application has been approved, was in place
before Contilli reached normal retirement age and has
been applied consistently. This shows that a cutback has
not occurred. But it does not address §1053(a), which
deals with entitlement to benefits under a plan’s terms.
The problem with this plan’s terms is not that benefits
have been reduced generally (they haven’t) but that the
application rule causes a forfeiture unless the participant
applies before his “normal retirement age”. The Local 705
Fund does not make that actuarial adjustment and so is
out of compliance with §1053(a).
No. 07-2673                                               5

  There is one potential complication. Some statements
in the briefs suggest that pension benefits were increased
in January 1998, but only for participants who retired in
that month or later. Contilli may have timed his applica-
tion strategically to take advantage of this increase. The
anti-forfeiture rule in §1053(a) applies, however, only to
the benefits available on a person’s normal retire-
ment date. Thus if Contilli wants his pension benefits for
November and December 1997 and January 1998 (or their
actuarial equivalent in higher future pension checks), he
must accept the pension schedule that was in force in
October 1997, when he retired, plus any increases paid
to persons who were in retirement status on January 1,
1998. He cannot have the higher pension for persons
who retired in January 1998 and later, plus the extra
months’ benefits that he could have received by sub-
mitting his application in October 1997. If the Fund is
paying Contilli at a higher monthly rate reflecting an
increase in January 1998, he may already have received
the actuarial equivalent (and then some) of the three
missing months’ benefits calculated at the rate applicable
to someone who retired in 1997. The parties (and if neces-
sary the district judge) must work this subject out on
remand.
  There remains a dispute about how many months’
service the Fund should credit Contilli for during 1996
and 1997, when he worked sporadically. Contilli’s ap-
pellate brief is hard to follow, but as best we can make out
he concedes that the Fund gave him credit for all months
in which, according to his employers’ returns, he
worked the minimum number of hours required for
6                                               No. 07-2673

pension credit. The dispute concerns months in which
he was on sick leave—or would have been on sick leave,
had he paid the health-insurance premiums required
by the Local 705 Health and Welfare Fund for those
participants who are not working enough hours to
receive health benefits as part of their fringe-benefits
package. Time on sick leave qualifies as time on the job
for pension purposes, but the Health and Welfare Fund
did not certify to the Pension Fund that Contilli was on
sick leave for particular hours that would (he says) have
produced enough work and sick hours combined to
support additional pension credit. And the reason the
Health and Welfare Fund did not certify Contilli’s sick-
leave status is that he did not pay the premium for
health coverage that the Health and Welfare Fund de-
manded.
  Contilli concedes that he did not pay, but he says that the
Health and Welfare Fund asked for more money than the
legal limit for what is conventionally called “COBRA
continuation coverage.” 29 U.S.C. §§ 1161–69. He now
contends that, if the Health and Welfare Fund had
named the right premium, he would have paid it, and the
Pension Fund then would have given him additional
work credits that would have increased his monthly
pension.
  There are two problems with this line of argument (if we
have divined what Contilli is arguing). One is that an
error by the Health and Welfare Fund does not support
relief against the Pension Fund, a distinct entity. When
the Health and Welfare Fund certifies sick leave as eligi-
bility for work credits, it also makes to the Pension Fund
No. 07-2673                                                 7

a payment in lieu of the contribution that an employer
would have made had the participant still been working.
(We say “an” employer because this is a multi-employer
fund, and the Pension Fund may collect from several
employers, plus the Health and Welfare Fund, for covered
hours of any given participant.) The other problem is
that Contilli did not present his contention to the Health
and Welfare Fund, which therefore never has had a
chance to (a) collect the appropriate premium, and
(b) determine if Contilli really would have paid the
correct premium in 1996 and 1997, as he now says. The
district court found that Contilli had not made the ap-
propriate requests and thus had failed to exhaust his
administrative remedies.
  Contilli’s opening brief ignored this adverse ruling and
argued as if both the Health and Welfare Fund and the
district court had resolved the merits. His reply brief
does discuss forfeiture—but too late, and that brief misses
the point. The reply brief asserts that a proper notice of
COBRA continuation coverage “is mandatory and cannot
be waived” (Reply Br. 16). But the district court did not
find that Contilli had waived the receipt of a notice specify-
ing his right to health coverage. The court concluded
that Contilli had failed to alert the Health and Welfare
Fund to the supposed error in the premium and give it
an opportunity to make any appropriate findings and
adjust benefits accordingly. Exhaustion of administrative
remedies is one of ERISA’s requirements. See, e.g., Gallegos
v. Mt. Sinai Medical Center, 210 F.3d 803 (7th Cir. 2000).
  The coverage argument that Contilli did preserve—by
presenting it to the plans and raising it in the district
8                                               No. 07-2673

court—was that some of the employers for which he
worked in 1996 and 1997 did not make proper contribu-
tions to the Pension Fund, which therefore did not credit
him with all of his service. To the extent that Contilli
addresses exhaustion, he maintains that the plans’ failure
to provide him with a history of his employer contribu-
tions justified his failure to exhaust these matters with the
Trustees. But a shortcoming on the matter of employer
contributions does not justify the omission of a COBRA
argument from the submissions to the two Funds. Argu-
ments about employers’ contributions to the Pension
Fund have not been advanced on appeal. So the coverage-
related arguments in the appellate brief were not pre-
served, and the preserved arguments have not been
renewed.
  Now it may be that we have not grasped all of Contilli’s
arguments, but we have done the best we could with a
scattershot presentation. “Judges are not like pigs, hunting
for truffles buried in briefs.” United States v. Dunkel,
927 F.2d 955, 956 (7th Cir. 1991). If there is some argu-
ment that we have missed, but that was preserved both
in the administrative process and the district court,
Contilli may present it on remand. If there is another
appeal, each distinct argument should be highlighted
and the basis for thinking it preserved for appellate
resolution must be explained in detail.
  The judgment is vacated, and the case is remanded
for proceedings consistent with this opinion.



                           3-23-09
