District Judge David G. Larimer


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Testa worked for Xerox Corp. from 1972 until 1983, when he took a $30,000 lump-sum distribution from its Profit Sharing Plan (PSP). He again worked for Xerox from 1985 to 2008. In 1990 Xerox merged the PSP into its Retirement Income Group Plan (RIGP). Testa became an RIGP participant. On retiring in 2008, the RIGP and administrator Becker calculated Testa’s retirement benefit using a “phantom account” offset, deducting the 1983 distribution and hypothetical interest thereon had it remained in the pension plan until Testa’s retirement in 2008. On competing motions therefor in Testa’s lawsuit asserting his pension benefits were reduced contrary to ERISA, the court granted Testa summary judgment. It ordered defendants to recalculate, and pay, Testa benefits, both prospectively and retroactively, according to the “new hire” formula set out in its Jan. 5, 2016 decision in Frommert v. Becker. In 2006 Second Circuit held the phantom account could not be applied to an employee rehired prior to 1998. Testa was rehired before 1998. Given the RIGP’s terms and the extent of its disclosure to Testa, the “new hire” remedy struck an appropriate balance of ensuring that Testa was fully, but not overly, compensated for both periods of employment.