A. Finkl & Sons is a large, Chicago-based steel company. Until 2006, it offered its employees a defined benefit pension plan. It was then that it decided to terminate the Plan. Because the plan was an ERISA-qualified plan, the termination process was rather complicated and involved many steps. Finkl began the involved process, after receiving permission to do so from the Pension Benefit Guarantee Corporation. The Plan notified the employees of the termination and adopted Amendment 1, which provided that all Plan participants, even current employees, could elect to receive their pension benefits as an immediate annuity upon Plan termination. The Plan even distributed election forms for employees to indicate whether they wanted an immediate annuity or wait for retirement. Ultimately, Finkl decided not to terminate the Plan. It advised its employees and the PBGC of that decision. The PBGC approved the company's actions and the Plan adopted Amendment 2, which deleted Amendment 1. A group of employees demanded that the Plan go ahead with the termination and distribution and also demanded that the Plan revise the way benefits were calculated as it related to bonuses. The plaintiffs claimed that they were unaware of the distinction between regular bonuses (which were credited to an employee’s retirement calculation) and special bonuses (which were not credited to an employee’s retirement calculation). The Plan denied both claims and plaintiffs filed suit under ERISA. Judge Pallmeyer (N.D. Ill.) granted summary judgment to the Plan. She concluded that Amendment 2 violated neither ERISA’s anti-cutback provision or the Plan’s anti-cutback clause. She also concluded that plaintiffs could not prevail on their benefit recalculation argument. Plaintiffs appeal.

In their opinion, Seventh Circuit Judges Manion, Wood, and Williams affirmed. The Court agreed with plaintiffs that ERISA prohibits a plan from decreasing beneficiaries' protected benefits. Likewise, a Plan can include a clause that protects beneficiaries' benefits. It is these "anti-cutback" provisions the plaintiffs claim were violated in this case. The Court first addressed the statutory claim. The ERISA anti-cutback clause applies only to benefits tied to a participant’s actual retirement. The Amendment 1 benefit is not tied to retirement and is therefore not protected. The Court turned to the Plan language. That language protects "pension benefits already accrued." When the Plan denied plaintiffs' claim, it concluded that Amendment 1 conferred a protected benefit only upon the Plan's termination and thus was not subject to the anti-cutback clause. The Court concluded that the Plan’s interpretation was reasonable. It also rejected plaintiffs' argument that the benefit was protected because the plan had, in fact, terminated. The Court reiterated the number of required steps in the approval process before statutory termination. The record does not support plaintiffs' conclusion. With respect to the second claim, regarding the inclusion of bonuses in the benefit calculation, the Court concluded that there was no evidence in the record creating a material issue of fact. Even if plaintiffs were unaware of the distinction used by the company, summary judgment was still appropriate.