Supreme Court limits authority of pension plans to cut back benefits promised to early retireesJune 8, 2004, Washington, D.C. - In a unanimous decision, the Supreme Court has limited the authority of multiemployer pension plans to limit pension benefits previously promised to early retirees. Mayer, Brown, Rowe & Maw LLP associate
David Gossett represented the workers before the Supreme Court.
The case involves Thomas Heinz and Richard Schmitt, two construction workers who in 1996 took early retirement under a benefits plan administered by the Central Laborers Pension Fund. At issue before the court was whether a 1998 amendment to their plan, which expanded the situations in which post-retirement work allowed the plan to "suspend" payment of early-retirement benefits, violated the federal statute forbidding pension plans from reducing previously accrued early-retirement benefits. The Court ruled that it was unlawful to apply the amended rules to previously accrued benefits. As Mr. Gossett explained to the Associated Press, "The Supreme Court got it, they understood that ERISA is about pension expectations, and you can't change the rules retroactively."
The decision strengthens the pension rights of millions of workers. Mr. Gossett told the Wall Street Journal that the ruling affects mainly workers with multiemployer plans, who tend to be in such industries as construction, unionized groceries and some portions of the entertainment industry. It doesn't affect workers with 401(k) retirement plans.
(Central Laborers' Pension Fund v. Heinz et
al., No. 02-891)
Brief | Oral Argument Transcript
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