                                         PRECEDENTIAL

      UNITED STATES COURT OF APPEALS
           FOR THE THIRD CIRCUIT

                  ________________

                Nos. 13-4633 & 13-4743
                  ________________

    JOHN COTTILLION; BEVERLY ELDRIGE,
on behalf of themselves and all others similarly situated,

                         Cross-Appellants in No. 13-4743

                            v.

UNITED REFINING COMPANY; UNITED REFINING
       COMPANY PENSION PLAN FOR
          SALARIED EMPLOYEES;
        UNITED REFINING COMPANY
         RETIREMENT COMMITTEE;
       JOHN AND MARY DOES 1 TO 10

           United Refining Company; United Refining
           Company Pension Plan for Salaried Employees;
           United Refining Company Retirement
           Committee,

                         Appellants in No. 13-4633
                    ________________

        Appeal from the United States District Court
         for the Western District of Pennsylvania
          (D.C. Civil Action No. 1-09-cv-00140)
         District Judge: Honorable Cathy Bissoon
                    ________________

                  Argued October 1, 2014

              Before: AMBRO, CHAGARES,
              and VANASKIE, Circuit Judges

                  (Filed: March 18, 2015)

Eugene D. Fowler, Esq.
Christopher J. Rillo, Esq. (Argued)
Diane M. Soubly, Esquire
Rillo Law Group
111 Pine Street, Suite 1400
San Francisco, CA 94111
       Counsel for Appellants/Cross Appellees

Tybe A. Brett, Esq. (Argued)
Ellen M. Doyle, Esq.
Joel R. Hurt, Esq.
Feinstein, Doyle, Payne & Kravec
429 Forbes Avenue
Allegheny Building, 17th Floor
Pittsburgh, PA 15219
       Counsel for Appellees/Cross Appellants




                             2
Jessica R. Amunson, Esq.
Jenner & Block
1099 New York Avenue, Suite 900
Washington, DC 20001

Craig C. Martin, Esq.
Matthew J. Renaud, Esq.
Amanda S. Amert, Esq.
Jenner & Block
353 North Clark Street
Chicago, IL 60654

Janet M. Jacobson, Esq.
The American Benefits Council
1501 M Street, N.W., Suite 600
Washington, DC 20005

Scott J. Macey, President and CEO
Debra Davis, Vice President
The ERISA Industry Committee
1400 L Street, N.W.
Washington, DC 20005

Kat Comerford Todd, Esq.
Steven P. Lehotsky, Esq.
Warren Postman, Esquire
National Chamber Litigation Center, Inc.
1615 H Street, N.W.
Washington, DC 0062
      Counsel for Amicus Appellants/Cross-Appellees




                            3
Mary E. Signorille, Esq.
Anita Khushalani, Esq.
AARP/AARP Foundation Litigation
601 E Street, N.W.
Washington, DC 20049
      Counsel for Amicus Appellees/Cross-Appellants

                    ________________

                        OPINION
                    ________________

AMBRO, Circuit Judge


        The Employee Retirement Income Security Act of
1974 (“ERISA”), a law meant to guarantee that employees
will receive the retirement benefits they are promised,
governs pension plans. We determine whether the calculation
of retirement benefits that the United Refining Company and
co-defendants (who appeal and are collectively referred to
throughout this opinion as “United”) provided in a pension
plan to a specific class of former employees (collectively,
“Employees”) varied, as United argues, depending on how
old they were when they elected to receive the benefits.
Because United’s reading finds no support in the text of the
plans, we affirm the rulings of the District Court.

I.    Factual Background and Procedural History

       John Cottillion worked at United for 29 years, from
1960 until 1989. He was 54 years old when he quit, and his
benefits had vested under “the 1980 Plan,” which is the
version of United’s Pension Plan for Salaried Employees that
applies to people whose benefits vested (i.e., became non-




                             4
forfeitable under ERISA) after 1980 but before 1987.
Because his employment at United was long enough to vest
benefits and he was too young on leaving United to receive
those benefits, Cottillion belongs to the subset of former
United employees involved in this lawsuit: “terminated vested
participants” or “TVPs” in United’s pension plan. TVPs are
distinct from Early Retirees, who are not a part of this
litigation; the latter are people who retired directly from
United at an age older than 59½ or 60 (depending on the
applicable Plan) but younger than 65.

        When Cotillion left the company, United wrote a letter
informing him that “[a]s a terminated Pension Plan
participant with a vested interest, you are eligible for a
deferred retirement benefit from the United Refining
Company Pension Plan for Salary [sic] Employees.” The
letter further stated that he “may elect to have [his] monthly
retirement benefit begin at anytime [sic] after October, 1995,”
the month in which Cottillion would turn 60, and that his
“monthly retirement benefit will be $573.70 at age 60.” The
letter did not state that the amount of Cottillion’s benefit
depended on whether he elected to receive it at age 60 or
later. TVPs under the 1987 Plan were likewise informed of
their pension amounts and told they could receive them the
month following their “59½ birthday . . . without any
reduction for early retirement.” E.g., Beverly Eldridge,
Application for Commencement of Deferred Vested Benefits,
Terminated Vested Participants (Jan. 9, 1997).

       On January 30, 2002, United amended and restated the
plan, backdated to January 1, 1995 (the “1995 Plan”), to
comply with then-recent amendments to ERISA. The Internal
Revenue Service informed United that certain changes needed
to be made to the Plan before it could issue a letter
confirming that the 1995 Plan would receive favorable tax
treatment; in response, United amended the 1995 Plan,




                              5
effective January 1, 2002 (the “2002 Plan”). Both the 1995
and 2002 Plans included a § 5.04(c), absent from the 1980
and 1987 Plans, stating that the benefits of TVPs who receive
pensions before age 65 would be “actuarially reduced to
reflect the earlier starting date thereof.” Neither the 1995
Plan nor the 2002 Plan applies to any employee-plaintiff in
this case, but they are relevant because of what happened
next.

        In 2005, plan actuaries (professionals who perform a
variety of services relating to implementing and maintaining
ERISA plans) at the firm Towers Perrin informed Lawrence
A. Loughlin, the plan administrator, that United had
erroneously paid to TVPs vested under the 1980 and 1987
Plans pensions that were not “actuarially reduced,” i.e.,
calculated in light of the TVP’s age. (The younger a
beneficiary is, the longer she will receive benefits, and thus
retirement plans often lower benefits for people who take
them early so that the benefits are worth the same regardless
when they begin to be paid.) Because operational deviations
from the terms of ERISA-governed plans can jeopardize their
favorable tax treatment, John Owsen, United’s (now
deceased) longtime outside counsel for benefits matters, sent
a letter to the IRS in November 2005 proposing to recoup the
excess funds paid. Owsen’s letter followed the IRS’s
voluntary correction program through which employers may
notify the Service of proposals to fix mistakes in
administering ERISA plans and receive assurance that the
IRS will not disqualify a plan from favorable tax treatment.
The letter cited and attached the 2002 version of § 5.04(c),
but it did not call attention to the absence of this language in
the 1980 and 1987 Plans. In March 2006 the IRS issued a
“Compliance Statement,” which affirmed that the IRS “will
not pursue the sanction of Plan disqualification on account of
the qualification failure described in the Submission,” but
cautioned that it “does not express an opinion as to the




                               6
accuracy or acceptability of any . . . material submitted with
the application” and “should not be construed as affecting the
rights of any party under any other law, including” ERISA.

        In July and August 2005, after notification from
Towers Perrin but before the IRS correspondence, United sent
letters to TVPs who had not yet begun to receive benefits “to
clarify when you can receive your pension from United
Refining Company and under what terms.” This letter stated
that if a TVP elected to receive retirement benefits before
turning 65, the benefit would be reduced to reflect the early
election date in accord with the following table:

                     Age          Factor
                      64           89%
                      63           80%
                      62           72%
                      61           65%
                      60           59%
                     59 ½          56%


        About a year later, United sent letters to TVPs who
were already receiving pensions. These letters stated, “The
Plan document requires that all pension benefits paid to
terminated vested participants PRIOR to their Normal
Retirement Age of 65 years MUST be actuarially reduced to
the earlier payment date” (emphasis in original). Indeed,
some retirees were told that in two weeks from the date of the
letter their monthly pension would be lowered “until the
excess payments have been recovered, after which you will
begin receiving the amount that should have been provided to
you based on the correct calculation.” Others were told that
in two weeks “your monthly pension benefit payment will
stop and you will not receive any future payments.




                              7
Additionally, in order to recover excess payments, you should
repay the Plan” the amount of money already paid that
exceeded the actuarially reduced benefit. In Cottillion’s case,
his pension of $506.58 per month was eliminated, and he was
told he should pay the Plan $14,475. The letters represented
that the reductions were necessary for the Plan to retain its
favorable tax treatment under the Internal Revenue Code and
that the statements in the letter were “based on the [IRS]’s
published revenue procedures and Compliance Statement
which the Plan Retirement Committee must follow.”

        After receiving this letter, the Employees represent
that Cottillion had a telephone conversation with Loughlin,
the plan administrator and author of the letter, during which
Cottillion complained about the reduction in pension benefits.
Loughlin told him that the reduction corrected a mistake that
had resulted in excessive payments. Several other aggrieved
TVPs wrote to Loughlin, who replied by letter that the plan
documents required the correction to maintain the plan’s
favorable tax treatment. Some, but not all, who complained
were informed that they could file a written appeal of
Loughlin’s decision.

       The Employees sued in the Western District of
Pennsylvania alleging, as relevant here, that United’s actions
deprived them of a benefit to which they were entitled under
the Plan, in violation of 29 U.S.C. § 1132(a)(1)(B), and that
they violated ERISA’s “anti-cutback” rule, 29 U.S.C.
§ 1054(g), which prohibits employers from amending a plan
in a way that reduces benefits accrued under a defined benefit
plan (such as the Plans at issue here).          Judge Sean
McLaughlin denied United’s Motion to Dismiss and later
granted the Employees’ Motion for Summary Judgment in
part and denied United’s Motion for Summary Judgment,
holding that United’s actions violated the anti-cutback rule.
When Judge McLaughlin resigned to enter the business




                              8
world, the case was assigned to Judge Cathy Bissoon. She
granted the Employees’ Motion for Class Certification,
granted in part their Motion for Final Remedy (enjoining
United from actuarially reducing Employees’ benefits and
awarding damages to make whole those who had been
receiving too little, but declining to order United to pay
anything to TVPs who had not yet elected to receive
benefits), and granted United’s Motion for Judgment on the
Pleadings, dismissing with prejudice the Employees’
remaining counts because any relief would be duplicative.

      United appeals then-Judge McLaughlin’s summary
judgment decision and Judge Bissoon’s order on remedies.
The Employees cross-appeal the latter order and the award of
judgment on the pleadings.

II.   The District Court Properly Excused                  the
      Employees from Exhausting Plan Remedies.

        United argues that it was entitled to summary
judgment because the named plaintiffs failed to exhaust the
remedies available to them under the Plan. See, e.g., Harrow
v. Prudential Ins. Co. of Am., 279 F.3d 244, 249 (3d Cir.
2002). The Employees do not dispute that ordinarily the
named plaintiff in an ERISA class action must exhaust plan
remedies before bringing suit and that Cottillion and Beverly
Eldridge did not, but they argue that: (1) they were not
required to exhaust remedies because of the nature of their
claim; (2) exhaustion is an affirmative defense and United has
not met its burden of persuasion on the issue; and (3) there is
undisputed record evidence that exhaustion would have been
futile.

        While we review de novo the legal standard that a
district court applies in determining whether an employee
must exhaust plan remedies before coming to federal court,




                              9
the court’s ultimate decision whether to require a plaintiff to
exhaust is committed to its sound discretion. Harrow, 279
F.3d at 248; see also D’Amico v. CBS Corp., 297 F.3d 287,
290 (3d Cir. 2002); Dishman v. UNUM Life Ins. Co. of Am.,
269 F.3d 974, 984 (9th Cir. 2001); Stevens v. Employer-
Teamsters Joint Council No. 84 Pension Fund, 979 F.2d 444,
459 (6th Cir. 1992); Springer v. Wal–Mart, 908 F.2d 897, 899
(11th Cir.1990); Janowski v. Int’l Bhd. of Teamsters Local
No. 710 Pension Fund, 673 F.2d 931, 935 (7th Cir. 1982),
judgment vacated on other grounds, 463 U.S. 1222 (1983).

       The Employees argue that the exhaustion requirement
does not apply to their anti-cutback claim based on 29 U.S.C.
§ 1054(g), as there is “a distinction . . . between claims based
on pension rights created by contract, which must be
[exhausted if the plan provides for remedies], and claims
based on purely statutory rights created by ERISA, which
may be asserted in federal court directly.” Delgrosso v.
Spang & Co., 769 F.2d 928, 932 (3d Cir. 1985). We need not
resolve whether in general the exhaustion requirement applies
to an anti-cutback claim or whether this particular suit states
“a simple contract claim artfully dressed in statutory
clothing.” Drinkwater v. Metro. Life Ins. Co., 846 F.2d 821,
826 (1st Cir. 1988). As discussed below, the District Court
did not abuse its discretion in holding that exhaustion would
prove futile.

       The Employees misconstrue the futility exception to
the exhaustion requirement when they argue that, because
exhaustion is an affirmative defense, United bears the burden
of proving that it would not be futile. True, “[t]he exhaustion
requirement is a nonjurisdictional affirmative defense” for
United. Metro. Life Ins. Co. v. Price, 501 F.3d 271, 280 (3d
Cir. 2007). Yet futility is an exception to the exhaustion
requirement, and “[a] party invoking this exception must
provide a clear and positive showing of futility before the




                              10
District Court.” D’Amico, 297 F.3d at 293; accord Harrow,
279 F.3d at 249. Therefore, this argument against dismissal
for failure to exhaust also fails.

      In any event, the District Court held that the
Employees had shown exhaustion of their Plan remedies
would have been futile. As we wrote in Harrow:

       Whether to excuse exhaustion on futility
       grounds rests upon weighing several factors,
       including: (1) whether plaintiff diligently
       pursued administrative relief; (2) whether
       plaintiff acted reasonably in seeking immediate
       judicial review under the circumstances; (3)
       existence of a fixed policy denying benefits; (4)
       failure of the [defendant] to comply with its
       own internal administrative procedures; and (5)
       testimony of plan administrators that any
       administrative appeal was futile. Of course, all
       factors may not weigh equally.

279 F.3d at 250.

        The District Court excused the Employees from the
exhaustion requirement because they showed that United had
a fixed policy of denying benefits. Cottillion v. United Ref.
Co., No. 1:09-cv-140, 2013 WL 1419705, at *14–*15 (W.D.
Pa. Apr. 8, 2013). The Employees made this showing by
supplying the District Court with extensive correspondence
between Loughlin and aggrieved TVPs. Loughlin sent form
letters out to all TVPs apprising them of the reduction in their
benefits. When anyone wrote back to him to complain,
Loughlin would reply that the change in benefits was
mandated by the IRS. Many of the letters failed to inform
recipients of the possibility of an appeal. There is no




                              11
evidence in the record that any TVP got anywhere by seeking
further review from Loughlin, and that United continues to
adhere to the position that TVPs are only entitled to
actuarially reduced benefits further supports the inference that
exhaustion was futile. At least one TVP (Frederick Hane)
followed the instructions in Loughlin’s letter and the 1987
Plan’s appeals procedures. But rather than demonstrate that
the issues raised in Hane’s letter were considered an appeal of
an earlier determination, Loughlin (on behalf of the
retirement committee) treated Hane’s objections as
“questions” and offered him no relief or opportunity for
further review.

       The failure of Hane’s appeal, the existence of a fixed
policy denying benefits as evidenced by the correspondence
between Loughlin and the many TVPs with letters in the
record, and the absence of any evidence before us to suggest
that an appeal from Loughlin’s letter was anything other than
time wasted, lead us to conclude that the District Court did
not abuse its discretion in applying the futility exception to
the exhaustion requirement. Thus we continue.
III.   The Plans Unambiguously Afforded TVPs
       Retirement Benefits Without Actuarial Reduction.

       The 1980 and 1987 Plans gave the plan administrator
discretion in interpreting their terms. Thus, in evaluating the
Employees’ benefits-due claim, we review Loughlin’s
interpretation under a deferential standard and will uphold it
unless it is arbitrary and capricious. Firestone Tire & Rubber
Co. v. Bruch, 489 U.S. 101, 111 (1989); Fleisher v. Standard
Ins. Co., 679 F.3d 116, 120–21 & n.2 (3d Cir. 2012).
However, the parties dispute the standard of review for the
Employees’ claim that Loughlin’s interpretation of the Plan
adopted in his letters to TVPs (that the Plan provided only
actuarially adjusted benefits, contrary to United’s earlier




                              12
representations) violated the anti-cutback rule.         The
Employees urge that the District Court correctly deferred to
Loughlin’s first interpretation of the Plans—that they
provided benefits in the same dollar amount to TVPs who
elected to receive them before age 65 as to those who began
receiving them at age 65 or later—and correctly did not defer
to the second one as the “reinterpretation” was really a sub
rosa plan amendment to reduce accrued benefits in violation
of the anti-cutback rule. United argues that under Conkright
v. Frommert, 559 U.S. 506 (2010), Loughlin’s final
interpretation—the one allowing reduction of benefits—is
entitled to deference.

       We need not determine who has the better of this
argument. As we shall see, no amount of deference can
rescue Loughlin’s second interpretation from its flat
contradiction with the terms of the 1980 and 1987 Plans. We
therefore assume without deciding that the deferential
arbitrary and capricious standard applies, under which a
“court may overturn a decision of the Plan administrator only
if it is without reason, unsupported by the evidence or
erroneous as a matter of law.” Mitchell v. Eastman Kodak
Co., 113 F.3d 433, 439 (3d Cir. 1997) (internal quotation
marks omitted) (quoting Abnathya v. Hoffmann–LaRoche,
Inc., 2 F.3d 40, 45 (3d Cir.1993)), abrogated on other
grounds by Metro. Life Ins. Co. v. Glenn, 554 U.S. 105
(2008).     Even under that standard, an administrator’s
“interpretation may not controvert the plain language of the
document.” Dewitt v. Penn-Del Directory Corp., 106 F.3d
514, 520 (3d Cir. 1997).




                             13
      A.     The Plans’ Texts Support the Employees’
             Position.

       To determine whether Loughlin’s second interpretation
contradicts the actual words of the 1980 and 1987 Plans, we
quote the relevant provisions.

      Article VII of the 1980 Plan reads:

      7.01   Required Service for Vesting

      If a Participant’s employment shall terminate prior to
      his Normal Retirement Date [age 65, § 4.01] or an
      Early Retirement Date [age 60, § 4.02], for any reason
      other than death, he shall be entitled to a deferred
      vested Retirement Income if he is credited with at least
      ten . . . years of Vesting Service at the time of his
      employment termination. . . .

      7.02 Amount and Commencement of Deferred
      Vested Retirement Income

      The amount and time of commencement of a deferred
      vested Retirement Income to a Participant who
      satisfies the requirements of Section 7.01 shall be
      determined in accordance with the provisions of
      Section 5.03, based on the Participant’s Benefit
      Service and Average Compensation at the time of
      employment termination. . . .

      Section 5.03 provides:

      A Participant who retires on an Early Retirement Date
      may elect to receive one of the following:




                               14
      (a) His Accrued Retirement Income computed as of his
      Early Retirement Date commencing at the end of the
      month in which his Normal Retirement Date would
      have occurred.

      (b) A reduced amount of Retirement Income to begin
      at the end of the month in which his Early Retirement
      Date occurs, computed so as to be a percentage of the
      benefit provided for him under paragraph (a) of this
      Section 5.03, in accordance with the following table:

   Number of Years Prior to
   Normal Retirement Date
     (Interpolate if not a          Percentage
       Whole Number)
              0                       100.0%
              1                       100.0%
              2                       100.0%
              3                       100.0%
              4                        93.3%
              5                        86.7%


       On October 27, 1988, United put in place
“Amendment 5” to the 1980 Plan, effective July 1, 1987.
Amendment 5, which applies to all class members covered by
the 1980 Plan, in relevant part rewrites § 5.03 of the 1980
Plan to read in its entirety:

      A Participant who retires on an Early Retirement Date
      will receive his Accrued Retirement Income computed
      as of his Early Retirement Date commencing at the end




                              15
      of the month in which his Early Retirement Date
      occurs.


       “Accrued Retirement Income . . . as of any particular
date” is defined under § 5.02 as an amount to be computed in
accordance with § 5.01, which lays out the method of
calculation for the “annual rate of Retirement Income.”
Section 5.01 describes the method of calculation as (roughly
speaking) a percentage of average compensation multiplied
by time of service with United, with qualifications and
complications not at issue in this appeal.

       To summarize, per § 7.02 a TVP gets retirement
income in accordance with § 5.03, which states that a
participant who retires is entitled to “Accrued Retirement
Income,” which is calculated under § 5.01 with respect to a
participant’s average compensation and length of service with
the company.

       The 1987 Plan is quite similar as it concerns this
appeal. Article VII provides:

      7.01   Required Service for Vesting.

      If a Participant’s employment shall terminate prior to
      his Normal Retirement Date for any reason other than
      death, he shall be entitled to a deferred vested
      Retirement Income if he is credited with at least five
      . . . years of Vesting Service at the time of his
      employment termination. . . .




                             16
      7.02 Amount and Commencement of Deferred
      Vested Retirement Income.

      The amount of a deferred vested Retirement Income to
      a Participant who satisfies the requirements of Section
      7.01 shall be determined in accordance with the
      provisions of Section 5.03, based on the Participant’s
      Benefit Service and Average Compensation at the time
      of employment termination. . . .

      Section 5.03 provides:

      Early Retirement Annual Accrued Retirement Income.

      A Participant who retires on an Early Retirement Date
      will receive his Accrued Retirement Income computed
      as of his Early Retirement Date commencing at the end
      of the month in which his Early Retirement Date
      occurs.

      “Accrued Retirement Income” is the amount specified
in § 5.02, which, as in the 1980 Plan, is the “amount
computed in accordance with Section 5.01,” which in turn
provides a formula roughly based on a percentage of average
compensation multiplied by the employee’s tenure at United.

        The Early Retirement Date under the 1987 Plan
initially occurred the month after an employee turned 60, but
it was lowered effective February 1, 1996, to age 59½.

       A straightforward reading of the 1980 and 1987 Plans,
consistent with United’s early interpretations of these Plans,
leads to the conclusion that TVPs were entitled to pensions in
an amount that did not include an actuarial adjustment for the
number of years younger than 65 that they were when they




                               17
retired. Under both plans, § 7.02 tells us that a TVP gets
retirement income in accord with § 5.03, which states that a
retiree is entitled to “Accrued Retirement Income,” which is
calculated under § 5.01 with respect to a participant’s average
compensation and length of service with the company. Not
one of these provisions treats TVPs differently from people
who retire directly from United, and no provision requires
actuarial adjustment (read reduction) for taking retirement
benefits early. Loughlin’s second interpretation conflicted
with the plain meaning of the terms of the Plans and thus
denied the Employees benefits due them in violation of
§ 1132(a)(1)(B), notwithstanding the Plans’ conferral on him
of discretion to interpret Plan provisions. Epright v. Envtl.
Res. Mgmt., Inc. Health & Welfare Plan, 81 F.3d 335, 342–43
(3d Cir. 1996) (“By imposing a requirement which is
extrinsic to the Plan[s], [Defendants have] acted arbitrarily
and capriciously.”).

       The second interpretation also violated the anti-
cutback rule, which occurs when an “accrued benefit” is
eliminated or reduced by a “plan amendment.” 29 U.S.C.
§ 1054(g)(1). “There is no question but that a standard early
retirement benefit, provided exclusively upon the satisfaction
of certain age and/or service requirements, is an accrued
benefit that is protected by” § 1054(g).1 Bellas v. CBS, Inc.,


1
    The statute reads:
         (g) Decrease of accrued benefits through amendment
         of plan
                 (1) The accrued benefit of a participant under a
                 plan may not be decreased by an amendment of
                 the plan, other than an amendment described in
                 section 1082(d)(2) or 1441 of this title [neither
                 of which applies in our case].




                                 18
221 F.3d 517, 524 (3d Cir. 2000). Sections 7.01 and 7.02 of
both Plans provide precisely the early retirement benefits
described in Bellas and are thus “accrued benefits.”

       United argues, however, that the early retirement
benefits are not “accrued benefits” because § 5.01 of both
Plans provide calculations for “[t]he annual rate of
Retirement Income payable to a Participant who retires on or
after his Normal Retirement Date.” (emphasis added). Thus,
according to United, anyone who retires before his normal
retirement date has no accrued retirement benefits. What this
argument ignores is the combined effect of §§ 7.01, 5.03,
5.02, and 5.01. Section 7.01 vests retirement income in
TVPs; § 5.03 directs the administrator to calculate TVPs’
Accrued Retirement Income as of the date of early retirement,
while § 5.02 states that the amount of Accrued Retirement
Income is computed “in accordance with Section 5.01.” In
other words, §§ 5.01, 5.02, and 5.03 provide the method for
computing TVPs’ benefits, while § 7.01 actually confers the
benefits, making them “accrued” within the meaning of
ERISA.
      Our Court’s “view of what constitutes an ‘amendment’
to a pension plan has been construed broadly to protect

             (2) For purposes of paragraph (1), a plan
             amendment which has the effect of—
                    (A) eliminating or reducing an early
                    retirement benefit or a retirement-type
                    subsidy (as defined in regulations), or
                    (B) eliminating an optional form of
                    benefit,
             with respect to benefits attributable to service
             before the amendment shall be treated as
             reducing accrued benefits. 29 U.S.C. § 1054.




                             19
pension recipients.” Battoni v. IBEW Local Union No. 102
Employee Pension Plan, 594 F.3d 230, 234 (3d Cir. 2010).
“An erroneous interpretation of a plan provision that results in
the improper denial of benefits to a plan participant may be
construed as an ‘amendment’ for the purposes of” § 1054(g).
Hein v. F.D.I.C., 88 F.3d 210, 216 (3d Cir. 1996).2

       The critical question in this case, in light of the
absence of a formal plan amendment, is whether Loughlin’s
“interpretation of the Plan improperly denied accrued benefits
to” the Employees. Id. at 216–17. The answer is yes. In
1988, United’s understanding of the Plans accorded with the
plain reading of the Plans that we have discussed above. By
2005, United had reinterpreted the Plans and decided that
they required actuarial adjustments to the amounts paid to
TVPs who took early retirement. This incorrect interpretation
resulted in the improper denial of TVPs’ accrued early
retirement benefits and thus violated ERISA’s anti-cutback
rule.



2
  Some Circuits have taken a narrower view of the meaning of
“amendment” than Hein—see Richardson v. Pension Plan of
Bethlehem Steel Corp., 112 F.3d 982, 987 (9th Cir. 1997);
Dooley v. Am. Airlines, Inc., 797 F.2d 1447, 1451–53 (7th
Cir. 1986)—but, as the Second Circuit has noted, a Treasury
Regulation interpreting the provision of the Internal Revenue
Code that implements 29 U.S.C. § 1054(g) supports our
Court’s view and is entitled to deference under Chevron,
U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837
(1984). Kirkendall v. Halliburton, Inc., 707 F.3d 173, 183
(2d Cir. 2013) (discussing Limitations on Availability of
Benefits, 53 Fed. Reg. 26,050-01, 26,064 (July 11, 1988)
(codified at 26 C.F.R. § 1.411(d)–4)).




                              20
       B.     United’s Counterarguments Fail to Persuade.

        United makes several arguments to the contrary, none
convincing.      Its arguments can be grouped into four
categories: (1) internal textual arguments (the text of the 1980
and 1987 Plans supports United); (2) external textual
arguments (the text of documents other than the Plans
supports United); (3) structural (the Plans address Early
Retirees and TVPs in separate sections, and thus they treat
differently these different kinds of participants); and (4)
statutory (because ERISA sets a floor for benefits, we should
interpret the Plans to provide only that floor absent a clear
and express plan provision to the contrary). We address each
in turn.

              1.     The Internal Textual Argument

        United’s argument from the Plans’ text is that § 5.03
entitles only “[a] Participant who retires on an Early
Retirement Date” to benefits (emphasis added). They argue
that “retire” means “retire from United,” because
“‘Retirement Date’ expressly required ‘actual retirement’
from the Company with an immediate right to draw down a
pension benefit.” Opening Br. at 14. (Recall that by
definition all TVPs left United before they were old enough
to retire from the company at age 59½ or 60.) But no
definition in any plan defines “retire” or “Retirement Date”
with reference to separation from United. Instead, both the
1980 and 1987 Plans (at § 1.31) define “Retirement Date” as
the date of “actual retirement,” but not actual retirement from
United.

       For support, United cites pages 1645 ¶ 18 and 1684
¶ 27 of the Joint Appendix. Both citations lead to United’s
statement of material facts in support of its motion for
summary judgment, and that document in turn cites an expert




                              21
report by Nancy Keppelman (an ERISA lawyer) interpreting
the Plans. Setting aside the problem of considering expert
testimony on the interpretation of a pension plan, which is a
purely legal question and not properly the subject of expert
testimony, Nieves-Villanueva v. Soto-Rivera, 133 F.3d 92, 99
(1st Cir. 1997) (collecting circuit cases); Haberern v. Kaupp
Vascular Surgeons Ltd. Defined Ben. Plan & Trust
Agreement, 812 F. Supp. 1376, 1378 (E.D. Pa. 1992), the
expert does not even support United’s interpretation of the
meaning of “retire.” Keppelman writes, “The cross-reference
[from § 7.02 to § 5.03] did not confer early retirement
benefits on [TVP]s.” Keppelman Report 7, Jan. 24, 2012,
ECF No. 154-14. It may be that “the cross reference” does
not confer early retirement benefits, but § 7.01 explicitly
does, and § 7.02 clarifies that the amount of the benefits
conferred by § 7.01 “shall be determined in accordance with”
§ 5.03 (emphases added). By drafting an actuarial adjustment
into the Plan, United is requiring the benefits to be calculated
not in accordance with § 5.03, the exact opposite of the Plan’s
requirements.

              2.     The External Textual Argument

        The extrinsic documents on which United relies further
undermine its position. It posits that § 5.04(c) of the 1995
and 2002 Plans made explicit what had been true all along:
TVPs who took their pensions before turning 65 would be
entitled only to actuarially adjusted pensions. But even if it
were permissible to look to the 1995 and 2002 Plans for
guidance in interpreting the 1980 and 1987 Plans, the addition
of § 5.04(c) more strongly supports the Employees’ position
that, without the new language explicitly imposing an
actuarial adjustment, there was no such adjustment before.

       United also points to certain summary plan
descriptions (“SPDs”) to argue they clarify that actuarial




                              22
adjustments are required under the Plans. The 1987 and 1995
SPDs (which describe the 1980 and 1987 Plans, respectively)
state that employees who took vested retirement benefits
earlier than their normal retirement date would only be
entitled to actuarially reduced benefits.

       United’s reliance on the SPDs poses two principal
problems. First, the SPDs state that “[i]f the terms of the Plan
document and the Trust agreement and of this summary are
inconsistent, the terms of the Plan document and the Trust
agreement will control.” United Refining Company, Pension
Plan for Salaried Employees, Summary Plan Description 20
(Jan. 1 1987); United Refining Company, Pension Plan for
Salaried Employees, Summary Plan Description 20 (Jan. 1
1995). When the SPD contains this sort of a disclaimer and
the Plan is more favorable to beneficiaries than the SPD, the
Plan controls. Sturges v. Hy-Vee Employee Ben. Plan &
Trust, 991 F.2d 479, 480–81 (8th Cir. 1993) (per curiam);
Glocker v. W.R. Grace & Co., 974 F.2d 540, 542–43 (4th Cir.
1992); McGee v. Equicor-Equitable HCA Corp., 953 F.2d
1192, 1201 (10th Cir. 1992). As discussed, the SPDs conflict
with the Plans, as the Plans clearly do not contemplate
actuarial adjustment.

       Second, United published employee handbooks in
1985, 1991, 1994, and 1998 that are wildly inconsistent on
whether benefits are calculated with actuarial adjustment, and
the Employees not implausibly characterize the handbooks as,
by their own terms, SPDs. See, e.g., United Refining
Company, Salaried Employee Handbook 110 (Apr. 1, 1994)
(“The handbook contains Summary Plan Descriptions of the
plans . . . .”).  The 1985 handbook (published before
Amendment 5 to the 1980 Plan removed its actuarial
adjustment table) stated that pension benefits both for Early
Retirees (people who retired directly from United after age
59½ or 60 and before age 65) and TVPs who took benefits




                              23
before their Normal Retirement Date would be actuarially
reduced. The 1991 handbook contained no mention of
actuarial adjustments for early receipt of benefits. The 1994
handbook stated of TVPs, “You can begin receiving benefits
as early as age 60 with no reduction.” Id. at 84. The 1998
handbook is less quotable, but it includes a sample calculation
for a person who retires (not necessarily a TVP) at age 59½
and does not include an actuarial adjustment for the
participant’s age. Indeed, nowhere in the 1998 handbook is
there any indication that anyone’s benefits might be
actuarially reduced. These handbooks’ differences with each
other and with the SPDs strengthen our conviction that the
plain meaning of the Plans should control.

              3.     The Structural Argument

        United’s structural argument is stronger, but not strong
enough. It relies on expert reports from an actuary (Ian
Altman) and an ERISA lawyer (Keppelman), who point out
that Article 5 of the Plans addresses benefits for Early
Retirees—those who retire from United directly before
turning 65—while Article 7 addresses benefits for TVPs. If
the plans intended to treat the two categories of participants
similarly, why devote a separate section to each group? The
question, though provocative, does not overcome the
indisputable facts that the TVP section explicitly informs
readers that TVPs’ benefits are to be calculated “in
accordance with” Article 5 and that nothing in either the 1980
Plan or the 1987 Plan refers to actuarial adjustments for
people who elect to receive their pensions early. The
structure and language of the plan could be read to suggest
that without Article 7 TVPs would be entitled to nothing
more than ERISA’s statutory floor, but with Article 7 they are
entitled to what Article 7 provides, which is benefits
calculated in accordance with Article 5.




                              24
             4.     The Statutory Argument

        United’s statutory argument fares no better. ERISA
§ 206(a) does provide that TVPs are entitled to “no less than”
an actuarially reduced benefit. 29 U.S.C. § 1056(a). But for
the reasons stated above, these Plans expressly provided
TVPs with more than the statutory floor. Imposing a
requirement that a plan be even clearer than the one in this
litigation would be unreasonable. The case United relies
on—McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184 (2d
Cir. 2007)—only exposes its argument’s weakness. In
McCarthy, when a TVP took payment early, the

      benefit was actuarially reduced from the amount
      that would have been paid at age 65 in two
      respects. First, to reflect the time value of
      money, the Master Retirement Plan reduced the
      benefit by a 6.75 percent discount rate for each
      year prior to the age of 65 that payments began.
      Second, the benefit was reduced by a mortality
      factor to adjust actuarially for the possibility
      that a participant might not live to the age of 65.

Id. at 189. These explicit provisions are the opposite of what
we find in United’s Plans; far from a reference to actuarial
adjustment or silence that could arguably be understood only
to provide the minimum pension allowed under ERISA, the
1980 and 1987 Plans set out a detailed scheme for calculating
TVPs’ benefits, one that expressly omits any actuarial
adjustment.

IV.   United Forfeited Any Objection to the District
      Court’s Interest Rate.

      United next argues that, even if we hold that it owes
the Employees benefits without actuarial adjustment (as we




                              25
do), the District Court erred in its final order on remedies
when it ordered United to pay interest at 7.5% on the
Employees’ damages. The Court ordered this amount of
interest based on the 2002 Plan, which set 7.5% as the rate of
interest for actuarial calculations and on the basis of United’s
IRS submission, which laid out the company’s plan to recoup
excess payments to TVPs at 7.5% interest. Cottillion v.
United Ref. Co., No. 1:09-cv-140, 2013 WL 5936368, at *9
(W.D. Pa. Nov. 5, 2013). United asserts that because certain
sections of the Plan that entitle participants to lump sum
payments state that the interest rate in those contexts is the
30-year Treasury rate, the interest here should be 3.7%.

       We need not rule on this objection because it is raised
for the first time in United’s reply brief and hence is waived.
Kirschbaum v. WRGSB Assocs., 243 F.3d 145, 151 & n.1 (3d
Cir. 2001). Moreover, although reasonable objections could
be made to the District Court’s choice of an interest rate,
United’s proposed rate has no better grounding in the Plan
documents (the sections that specify the 30-year Treasury rate
apply only to lump sum payments in the event the Plan is
terminated or in the case of employees with very small
pension entitlements). And because there is some evidence
that the Plan provided 7.5% as a default rate, the District
Court’s order was not clearly erroneous.

V.     The Employees Are Not Entitled to More Relief
       Than the District Court Ordered.

       When the District Court entered its final order on
remedies, it concluded that class members who had not yet
elected to receive their benefits were entitled only to an
option to start receiving properly computed benefits at the
appropriate age under the Plan (or immediately if they were
older than 59½ or 60, depending on the Plan). If they were
older than 59½ or 60, they were not entitled to receive




                              26
damages in the amount of benefits they would have received
had they elected to receive (properly computed) benefits as
early as possible plus interest. According to the District
Court, that relief would be “entirely speculative.” Cottillion,
2013 WL 5936368 at *8.

        The Employees claim that “there is no economic
incentive for a [TVP] to delay commencing an unreduced
monthly benefit past his Early Retirement Date.” Employees’
Response and Cross-Appeal at 62. They are mistaken. In
fact, they do not dispute that entitlement to benefits requires
“actual retirement.” 1980 Plan § 1.31; 1987 Plan § 1.31.
Because retirement benefits are generally less than salary,
there is an incentive to keep working and to continue to be
paid for full-time work instead of electing to receive pension
benefits conditioned on retirement.

       The Employees advance three other theories to argue
that that the District Court’s injunction should be modified to
allow TVPs to receive the payments to which they would
have been entitled absent the reinterpretation—namely, unjust
enrichment, surcharge, and restitution. All of these rationales
suffer from the same flaw: the Employees failed to prove in
the District Court that class members would have taken
unreduced pension benefits early.

        The Employees do not seek remand to prove on an
individual basis that those eligible for unreduced early
retirement benefits who have not yet elected to take them (or
who only took them after turning 65) would have taken them
earlier but for United’s new interpretation of the Plan. In a
footnote, the Employees suggest that “the court could order
retroactive benefits using a utilization factor based on an
assumption that individual class members would have
delayed commencing an unreduced benefit by the average of
such delays prior to the cutback, as proposed by [their]




                              27
expert.” Employees’ Response Br. and Cross-Appeal at 65
n.20. However this suggestion would play out, the injured
class members suffered individualized damages, and this sort
of aggregate proceeding violates the ordinary rule that “a
class action cannot be certified in a way that . . . masks
individual issues.” Carrera v. Bayer Corp., 727 F.3d 300,
307 (3d Cir. 2013); see also Wal-Mart Stores, Inc. v. Dukes,
131 S. Ct. 2541, 2561 (2011) (rejecting as “abridging a
substantive right” the extrapolation of class-based damages
from a sample of the class).

       The Employees’ final argument readily fails. They
contend that the District Court should not have dismissed the
remaining counts of their complaint as duplicative of the anti-
cutback claim because it failed to award them full relief on
the anti-cutback count. In other words, they claim that the
order granting judgment on the pleadings to United should be
reversed for the same reasons that they contend the damages
awarded were inadequate. But because the Employees have
received the full remedy to which they are entitled, anything
more would indeed be duplicative. Thus, the District Court’s
decision was proper.

VI.    United’s Pending Motions

       There remain two motions pending: United’s Motion
for Stay of District Court Judgment and its Motion to Strike
Part H of the Employees’ Brief. The Motion to Stay is denied
as moot in light of our disposition of the appeal.

        Part H of the Employees’ Fourth Step Brief responds
to arguments that, they say, were improperly raised in
United’s Second Step Brief. United is correct that the
Employees should not have responded to these arguments by
way of a reply brief, but should have either moved for leave
to file a sur-reply or moved to strike United’s arguments. See




                              28
Fed. R. App. P. 28.1(c)(4); USX Corp. v. Liberty Mut. Ins.
Co., 444 F.3d 192, 201–02 (3d Cir. 2006). The Motion is
granted insofar as it attacks all but the last paragraph of Part
H, which responds to a letter by United informing us of a
non-precedential opinion that the Employees (rightly) argue is
irrelevant (like all the other cases brought to our attention by
United’s six 28(j) letters). For these reasons, all but the last
paragraph of Part H is stricken as an impermissible sur-reply
filed without leave.

                 *      *      *      *      *

       United provided detailed pension plans that clearly
explained how to calculate payments owed to those who, like
the Employees here, earned accrued benefits and left United
before they were eligible to receive them. The Plans’ method
of calculation did not include an actuarial adjustment for
participants who took benefits before turning 65, and ERISA
forbids United from drafting those reductions into the Plans
whether by amendment, “interpretation,” or otherwise.
United must pay the Employees what it promised, and thus
the careful and thorough judgments of the District Court are
affirmed.




                              29
