Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Innes v. Barclays Bank PLC USA Staff Pension Plan Committee

United States District Court, W.D. Virginia, Charlottesville Division

January 11, 2017



          Hon. Glen E. Conrad Chief United States District Judge.

         Carol Forester Innes filed this civil action under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001-1461. The case is presently before the court on the parties' motions for summary judgment. For the following reasons, the court will grant the motion for summary judgment filed by defendant Barclays Bank PLC USA Staff Pension Plan Committee (the "Plan Administrator" or "defendant"), and deny the motion for summary judgment filed by the plaintiff.


         Innes was employed by Barclays Commercial Corporation ("BCC"), a subsidiary of Barclays American Corporation ("BAC") and Barclays Bank PLC ("Barclays"), from April 1, 1981 to March 1, 1994. On February 28, 1994, BCC was sold to an affiliate of The CIT Group ("CIT"). Upon the sale of BCC to CIT, Innes became an employee of CIT. She remained with CIT until June 28, 1994.

         At the time of the sale, Innes served as the chief financial officer of BCC. In connection with the sale, she and other senior executives (the "BCC Executive Group") received a payment from a special pool of funds in the aggregate amount of $3, 500, 000, with individual shares ranging from $ 105, 000 to $685, 000. Innes' share of the special pool (the "Pool Payment") was $390, 000. The only prerequisites to each member's receipt of his or her Pool Payment were (1) successful completion of the sale to CIT, and (2) continued employment with BCC through the time of the sale. The dispute in this case centers on whether the Pool Payment is pensionable under the terms of the applicable pension plan.

         As a member of the BCC Executive Group, Innes was a participant in two Barclays-sponsored pension plans: the Restated Retirement Plan for Barclays American Corporation (the "BAC Retirement Plan") and the Barclays American Corporation Retirement Restoration Plan (the "Retirement Restoration Plan" or "Plan").[2] The pension plan specifically at issue in this case is the Retirement Restoration Plan.

         The Retirement Restoration Plan was designed to supplement the BAC Retirement Plan and to provide retirement income beyond the maximum benefit limitations set by ERISA. See BRCLY000004.[3] With respect to eligibility, computation and payment of benefits, and vesting, the Retirement Restoration Plan incorporates the corresponding provisions of the BAC Retirement Plan. The Retirement Restoration Plan also incorporates the administrative scheme of the BAC Retirement Plan. It provides that the Plan is to be operated under the direction of the Plan Administrator (referred to therein as the Retirement Committee) in accordance with the applicable administrative provisions of the B AC Retirement Plan, and that the Plan Administrator's "decision in any matter involving the interpretation and application of this Plan shall be final and binding, " BRCLY000007. Additionally, under § 9.7 of the BAC Retirement Plan, which is incorporated into the Retirement Restoration Plan, the Plan Adrninistrator (referred to therein as the Pension/Thrift Committee) is granted "the exclusive right, power and discretion to interpret any and all provisions of the Plan and to determine eligibility for benefits under the Plan, and to determine all questions of fact that may arise thereunder[.]" BRCLY000093.

         The provisions governing the amount of benefits payable to participants under the Retirement Restoration Plan incorporate by reference provisions related to the calculation of pension benefits under the BAC Retirement Plan. See BRCLY000005-6. In turn, the benefits payable under the BAC Retirement Plan are calculated with reference to that plan's definition of "Compensation." That definition was amended in 1992, two years prior to the sale of BCC to CIT. The amendment provided, in pertinent part, as follows:

Compensation means, for any Employee, the base pay, salary or wages paid to him by the Employer, plus overtime, commissions, bonuses paid through the end of the calendar year in which his Accrued Benefit is determined, Management Incentive Payments (except such payments made during 1983), including salary reduction amounts made pursuant to Section 401(k), Section 125 and Section 129, but shall not include severance pay, stay-pay or retention incentives, directors fees, management incentive payments which were deferred pursuant to a deferred compensation election by the Employee, or any amounts contributed to the Employee pursuant to this Plan or any other benefit plan or program of the Employer (exceptive as herein above stipulated).

         BRCLY000245. In July of 1994, the BAC Retirement Plan was further amended to make clear that the Pool Payments were not pensionable. See BRCLY000024 ("Effective as of July 26, 1994, no amount received by a Participant as special pay, stay pay or severance pay, including, but not limited to, any amount paid from any pool of funds created in connection with the sale of Barclays Commercial Corporation, shall be included in the definition of Annual Compensation.").

         In May of 1994, John Amato, Barclays' pension administrator, sent Innes and other former BCC executives letters regarding their deferred vested pension benefits under the Restated Retirement Plan and the Retirement Restoration Plan, along with statements containing the benefit calculations for each plan. The amount of "total compensation" on which the Restoration Plan benefits were calculated included the Pool Payments received by the executives. BRCLY000184. Innes was advised that she would receive a monthly benefit of $1, 585.84 payable from the Restoration Plan, in addition to a $2, 804.58 monthly benefit under the Restated Retirement Plan.

         After it was discovered that the Pool Payments had been included in the pension benefit calculations, the BCC executives were sent "revised" letters correcting the error. Innes' "revised" letter, dated August 8, 1994, omitted the monthly benefit under the Restoration Plan, and instead indicated that "[t]he current value of [her] Restoration Plan benefit in the amount of $101.20 will be paid in the form of a total lump sum distribution cash-out." BRCLY000185-186.

         In 1996, ten members of the BCC Executive Group filed suit in the United States District Court for the Western District of North Carolina, challenging the determination that their Pool Payments were not pensionable. See Bovd v. Restated Retirement Plan for Barclavs American Corporation. No. 3:96-CV-00341 (W.D. N.C. 1996) (the "Bovd case"). Although Innes was not a party to the lawsuit, she was deposed during the course of the litigation in June of 1997. During her deposition, Innes testified that she was asked to be a plaintiff in the lawsuit but made the "financial decision" not to do so. BRCLY000200. Innes explained that she was younger than many of the other BCC executives, and that "the present value of any additional benefits to [her] didn't warrant the investment of the legal fees for the suit." Id.

         On August 30, 2013, the Barclays Pension Service Center sent Innes a letter regarding her pension benefit options, along with the forms that she would need to complete to begin receiving payments effective December 1, 2013.[4] The letter indicated that she was entitled to a $2, 804.58 monthly benefit under the provisions of the Barclays Bank PLC U.S.A. Staff Pension Plan. It made no mention of any monthly benefit under the Retirement Restoration Plan.

         On September 20, 2013, Innes, through counsel, contacted the Barclays Pension Service Center by letter and requested copies of the BAC Retirement Plan and the Retirement Restoration Plan. Innes also requested an explanation of her pension benefits, including any benefits under the Retirement Restoration Plan. After Innes failed to receive a response to the letter, her attorney sent a second letter to the Barclays Pension Service Center in October of 2013, reiterating the requests made in the earlier letter.

         On November 22, 2013, Innes submitted her application for retirement benefits. Innes indicated that she was "expressly reserving] all legal and equitable rights to claim her entitlement to the additional benefit due her under the Retirement Restoration Plan." Pl.'s Suppl. to Administrative R, Docket No. 16 at 18.

         On March 5, 2014, Innes filed suit under ERISA, alleging, inter alia, that the named defendants improperly failed to pay benefits due under the Retirement Restoration Plan. See Innes v. Barclays Bank PLC USA Staff Pension Plan. No. 3:14CV00008 (W.D. Va. 2014). The defendants subsequently moved to dismiss that claim under Federal Rule of Civil Procedure 12(b)(6), based in part upon the plaintiffs failure to exhaust her administrative remedies. On December. I, 2014, the court granted the defendants' motion, and dismissed the case without prejudice to allow the plaintiff the opportunity to satisfy the exhaustion requirement. See Gavle v. United Parcel Serv.. Inc.. 401 F.3d 222, 226 (4th Cir. 2005) ("An ERISA welfare benefit plan participant must both pursue and exhaust plan remedies before gaining access to the federal courts.").

         Prior to the entry of the court's memorandum opinion and order, Innes submitted an application for benefits under the Retirement Restoration Plan. By letter dated January 26, 2015, the Plan Administrator denied Innes' claim for benefits. In so doing, the Plan Administrator explained, in pertinent part, as follows:

On or about February 28, 1994, you received a special payment in the amount of $390, 000. This special payment was expressly payable only upon the successful completion of the sale of your employer, Barclays Commercial Corporation and was offered to retain you as a key executive until the closing of the sale. This special payment also was intended to incent you to contribute fully to the successful closing of the sale of your employer.
The Plan's definition of pensionable compensation is contained in Section 1.3 of the Restated Retirement Plan of the Barclays American Corporation, Amended and restated January 1, 1989 (the "Retirement Plan"). Section 1.3 of the Retirement Plan specifically excludes from the definition of pensionable compensation "severance pay, stay-pay or retention incentives." Stay pay and retention incentives are used by Barclays in connection with divestitures as a mechanism to retain key members of an executive team during a sale period and the above definition of pensionable compensation reflects Barclays practice of excluding types of compensation that are not generally available to all employees.
You received a letter in May of 1994 from Mr. Amato of Barclays that was an estimate of your Plan benefits (copy enclosed). Due to a clerical error, Mr. Amato incorrectly included your special payment as pensionable compensation for 1994 on the second page Of that letter. Upon discovery of the clerical error, Mr. Amato sent you a revised estimate on August 8, 1994 that did not include your special payment as pensionable compensation (copy enclosed).
Mr. Amato's second estimate of your Plan benefits is correct because your special payment was a retention incentive or stay-pay and the Plan specifically excludes both types of payments from ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.