## Facts

- John W. Comrie worked for IPSCO for decades, beginning in Canada and relocating to Illinois after IPSCO moved its headquarters there; he alleged oral assurances that the relocation would not reduce his pension benefits.
- IPSCO established an unfunded “tophat” Supplemental Executive Retirement Plan (SERP) for senior executives that calculated benefits using years of service and a percentage of the executive’s average compensation over the preceding five years, excluding “bonus,” which the plan did not define.
- Following a change of control in 2007, Comrie’s reporting relationship changed after another lawyer was named general counsel; Comrie resigned and sought enhanced SERP benefits available after an “involuntary termination,” a term defined broadly to include material changes in position or authority.
- IPSCO accepted that Comrie qualified as involuntarily terminated but disputed the benefit amount because the SERP committee treated Comrie’s stock-linked compensation (including stock options and other stock-based income) as “bonus” and excluded it from “average compensation.”
- Comrie argued that “bonus” meant only cash bonuses and relied on wording from a different plan’s summary (a 401(k) summary plan description) that referenced “bonuses” and “incentive pay” separately.
- Comrie also asserted Canadian-law claims for additional pension and severance benefits tied to alleged promises and obligations from his earlier Canadian employment.
- The district court granted summary judgment for IPSCO on the ERISA claim and dismissed the Canadian-law claims; Comrie appealed.

## Issues

1. Whether the SERP committee acted arbitrarily and capriciously in interpreting the undefined term “bonus” to include discretionary stock-linked compensation and excluding it from the benefit calculation.
2. Whether any conflict of interest or lack of fiduciary status undermined deference to the committee’s decision.
3. Whether Canadian law could supply pension or severance remedies for a U.S.-based employment relationship and benefits governed by ERISA.

## Decision

- The Seventh Circuit affirmed the judgment for IPSCO.
- The court held the committee’s interpretation of “bonus” to include stock-based compensation was reasonable under deferential review because the plan granted interpretive discretion and the stock awards were discretionary.
- The court rejected the conflict-of-interest challenge, noting the committee members were similarly situated plan participants.
- The court affirmed dismissal of the Canadian-law claims because U.S. law governed the employment relationship and ERISA preempted non-ERISA legal theories seeking additional plan-related benefits.

## Legal Principles

- When an ERISA plan grants the administrator discretionary authority to interpret plan terms and determine benefits, courts review the administrator’s interpretation under an arbitrary-and-capricious standard and uphold reasonable interpretations of ambiguous terms.
- In a compensation-based retirement formula that excludes “bonus,” an administrator may reasonably classify discretionary stock-linked awards as “bonus” rather than includable base compensation.
- Materials from a separate benefit plan (including a different plan’s summary descriptions) do not control or rewrite the terms of another plan.
- ERISA preempts non-ERISA sources of law, including foreign law, to the extent they relate to an ERISA-governed employee benefit plan and seek benefits beyond the written plan terms.

## Conclusion

The court upheld the SERP committee’s exclusion of Comrie’s discretionary stock-based compensation as “bonus” under deferential ERISA review and barred additional recovery under Canadian law because ERISA and U.S. employment law controlled the benefits dispute.


Comrie v. IPSCO, Inc., 636 F.3d 839 (7th Cir. 2011)