Eli Lilly and Co. acted arbitrarily when it offset a U.S.-based employee's pension plan benefits to account for benefits he was to receive from a pension plan sponsored by the company's United Kingdom division according to the Seventh Circuit Court of Appeals.  In Bandak v. Eli Lilly & Co., the Seventh Circuit Court of Appeals found that an offset provision in the U. S. pension plan which called for benefits to be reduced when an employee received benefits from a "qualified defined benefit plan" "did not extend to the company's pension plan for U. K. employees."  Stephen I. Bandak attempted to gain pension benefits under both the U. S. and U. K. pension plans.  When he retired he was told his monthly benefits would be reduced by the amount of benefits he was receiving under the company's U. K. plan.  The court of appeals determined that the offset provision's reference to "qualified defined benefit plan" was limited to U. S. plans subject to the federal tax code.  The court of appeals rejected Eli Lilly's contention that the U. K. plan could be considered a "qualified defined benefit plan" because it was a "broad-based retirement plan" entitled to favorable tax treatment under English law.  The court said that two years after Bandak relocated to the United States, the company amended its plan to provide that any benefits received under a retirement plan maintained by a non-United States Eli Lilly company. 

"Eli Lilly Worker's Benefits Can't Be Offset," BNA Daily Labor Report, 11/19/09.