Anheuser-Busch Pension Participants Owed Enhanced Benefits

This 6th U.S. Circuit Court of Appeals disagreed with a district court’s finding that the plan language in the section about a “change in control” was ambiguous. Section 19.11(f) of the Anheuser-Busch plan states that, in the event of a “change in control,” the retirement benefits of a plan participant “whose employment with the Controlled Group is involuntarily terminated within three (3) years after the Change in Control shall be determined by taking into account an additional five (5) years of Credited Service and . . . an additional five (5) years of age.”

The court said “it is clear that when each term in the provision is understood according to its ordinary meaning, and no term is ignored, eligibility for enhanced pension benefits pursuant to Section 19.11(f) requires satisfaction of five elements: (1) that the recipient be a plan participant (2) whose employment with the Controlled Group (3) is involuntarily terminated (4) within three years after (5) a change in control. In the current case, (1) the plaintiffs were plan participants (2) whose employment with the Controlled Group (specifically, Metal Container Corporation) (3) ended when Ball acquired Metal Container without the plaintiffs’ consent and for reasons beyond the plaintiffs’ control (4) on October 1, 2009, which was less than three years after (5) InBev acquired Anheuser-Busch on November 18, 2008, an event which constituted a change in control.

The court added that the plan requires only that the individual’s “employment with the Controlled Group” be involuntarily terminated, not that the individual experience a job loss or some otherwise undefined period of unemployment.

The plaintiffs in the case are former salaried employees of the Metal Container Corporation, a subsidiary of Anheuser-Busch that manufactured aluminum beverage containers for Anheuser-Busch. While employed by Metal Container, each plaintiff participated in the Anheuser-Busch Pension Plan, a defined benefit plan governed by the Employee Retirement Income Security Act (ERISA). The plan was amended in 2000 to add “change in control” provisions.

In November 2008, InBev N.V., a Belgian corporation, acquired Anheuser-Busch, including its subsidiary Metal Container, in a hostile takeover. The plaintiffs continued working for Metal Container through September 30, 2009. On October 1, 2009, InBev spun off four of the Metal Container plants in a sale to the Ball Corporation, under an agreement that the plaintiffs would become employees of Ball and cease to be participants in the Anheuser-Busch ERISA plan, although they would have similar pension benefits at Ball.

The plaintiffs made claims to the Anheuser-Busch pension plan administrator for recalculation of their future Anheuser-Busch retirement benefits under Section 19.11(f) of Anheuser-Busch’s plan. The administrator concluded that “Section 19.11(f) was intended to provide an enhanced benefit to participants who suffer an actual termination or loss of employment.” The plaintiffs appealed the administrator’s decision, and the administrator denied the appeal.

The plaintiffs then filed suit in federal district court, asserting a claim for enhanced retirement benefits and a claim for breach of fiduciary duty. Finding that the plan language was ambiguous, the district court looked at evidence of the intent of the drafters of Section 19.11 of the plan, and agreed with the plan administrator that the section was intended to provide benefits to participants who suffered a loss of employment (see “Anheuser-Busch Wins Change in Control Benefits Case”). The plaintiffs filed an appeal of the district court’s decision.

The 6th Circuit’s opinion in Adams v. Anheuser-Busch Companies, Inc. is here.