Justia ERISA Opinion Summaries

This appeal involved an anti-cutback rule in section 204(g) of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1054(g). Specifically, section 204(g)'s anti-cutback rule forbid, with a few exceptions, a pension plan amendment that decreased a participant's "accrued benefit." At issue was whether this pension plan amendment violated the anti-cutback rule when it changed the calculation of that Social Security offset for participants who had not yet reached age 52, the plan's earliest retirement age, at the time of the amendment. The court held that it did not where Amendment Eight did not come within the scope of ERISA's anti-cutback rule and the anti-cutback rule protected only an accrued benefit from being reduced by plan amendment. The anti-cutback rule did not protect a mere expectation based on anticipated years of future employment. Accordingly, the court affirmed the judgment of the district court. View "Cinotto v. Delta Air Lines, Inc., et al." on Justia Law

When William and Adele divorced in 2008, she waived her right to proceeds from his 401(k) plan, governed by the Employee Retirement Income Security Act, 29 U.S.C. 1001-1461. He did not replace her as named beneficiary before he died intestate, nine months later. Because of a 2009 Supreme Court case, Kennedy v. Plan Administrator, 555 U.S. 285, the plan was obligated to pay the proceeds to Adele in accordance with plan documents regardless of the waiver. The district court held that estate could not attempt to recover the funds by bringing suit directly against Adele to enforce her waiver. The Third circuit reversed in part. Permitting suits against beneficiaries after benefits have been paid does not implicate any concern of expeditious payment or undermine any core objective of ERISA. View "Estate of Kensinger v. URL Pharma Inc." on Justia Law

Plaintiffs appealed summary judgment rejecting their claims under the Employee Retirement Income Security Act of 1974, (ERISA), 29 U.S.C. 1001 et seq. Plaintiffs were employees of Litton and participated in its retirement plan (Litton Plan B). Following corporate mergers and plan modifications, plaintiffs sued the successor corporation and Northrop Plan B, the plan that replaced Litton Plan B under section 502(a)(1)(B) to enforce their understanding of their rights under Northrop Plan B. The court held that summary judgment was appropriate on plaintiffs' claims under section 502(a)(1)(B) and 502(a)(3), rejecting their claims based on reformation and surcharge. View "Skinner, et al. v. Northrop Grumman Retirement Plan B, et al." on Justia Law

The collective bargaining agreement was scheduled to expire. During negotiations, the union disclaimed representation of the company's employees and terminated the collective bargaining process. The company then withdrew from the multiemployer pension plan. The pension fund imposed withdrawal liability and assessed $57,291.50, 29 U.S.C. 1399. The company demanded indemnification from the union pursuant to the collective bargaining agreement, which stated: "The Union shall indemnify the Company for any contingent liability which may be imposed under the Multiemployer Pension Plan Amendments Act of 1980." The district court concluded that an arbitration provision was enforceable. The arbitrator ordered the union to pay. The district court upheld the award. The Sixth Circuit affirmed, rejecting an argument that it would violate public policy for a union to indemnify an employer for any contingent liability to a pension plan established under the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1381-1461. View "Shelter Distrib., Inc. v. Gen. Drivers, Warehousemen & Helpers Union Local No. 89" on Justia Law

Plaintiffs brought a putative class action under the Employee Retirement Income Security Act, 29 U.S.C. 1001, to recover benefits under long-term disability benefit plans maintained by their former employers. The plans provide for reduction of benefits if the disabled employee also receives benefits under the Social Security Act, as both plaintiffs do. They dispute calculation of the reduction, claiming that the plans do not authorize inclusion in the offset of benefits paid to dependent children. Both plans require offsets for "loss of time disability" benefits. The district court dismissed. The Seventh Circuit affirmed, holding that children's Social Security disability benefits paid based on a parent's disability are "loss of time disability" benefits under the language of the plans. View "Schultz v. Aviall Inc. Long Term Disability Plan" on Justia Law

Plaintiffs brought a class action against their former employer, Siemens, and its retirement plans, claiming violation of the Employee Retirement Income Security Act in refusing to provide permanent job separation (PJS) pension benefits when Siemens terminated their employment. The Third Circuit reversed in part and directed entry of judgment in favor of Siemens on all issues. By their plain terms, the Siemens plans do not provide for PJS benefits. Siemens did not establish an ERISA section 204 "transition" plan by virtue of 13-day arrangement in 1998 that was part of Siemens' purchase of a business unit from Westinghouse, nor was Siemens obligated to provide PJS benefits under section 208, based on the purchase from Westinghouse. View "Shaver v. Siemens Corp." on Justia Law

The employer sought an early withdrawal from its obligation to make pension contributions to a multiemployer pension fund; it entered into a new collective bargaining agreement, six weeks before expiration of the existing agreement, that abrogated its obligation to make payments to the fund. The fund sued under the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1145. The district court entered summary judgment in favor of the fund. The Seventh Circuit affirmed, rejecting an argument that the agreement was ambiguous in providing that the employer could not “prospectively” change its obligation.View "Cent. States SE & SW Areas Pension Fund v. Waste Mgmt of MI, Inc." on Justia Law

GM offered separate defined-contribution 401(k) plans. Benefits were based on the amount of contributions and investment performance of an individual's separate account. The plans offered several investment options, including mutual funds, non-mutual fund investments, and the General Motors Common Stock Fund. Participants could change the allocation in any investment on any business day. The plans invested, by default, in the Pyramis Fund, not the GM Fund. In 2008, the fiduciary suspended purchases of GM and began selling the stock. Plaintiffs filed suit under the Employee Retirement Income Security Act, 29 U.S.C. 1109(a), alleging breach of fiduciary duty in allowing investment in GM after its financial trouble was the subject of reliable public information. The district court dismissed. The Sixth Circuit reversed, holding that plaintiffs sufficiently pleaded that "a prudent fiduciary acting under similar circumstances would have made a different investment decision." The fiduciary cannot escape its duty simply by asserting that the plaintiffs caused the losses by choosing to invest in the GM Fund. Such a rule would improperly shift the duty of prudence to monitor the menu of investments to participants. The fact that a participant exercises control over assets does not automatically trigger section 404(c) safe harbor.View "Pfeil v. State Street Bank & Trust Co" on Justia Law

Debtors were eligible to participate in their employers' ERISA 401(k) qualified retirement plans, but were not making contributions to those plans when they filed Chapter 13 petitions, but were repaying 401(k) loans to the plans. Proposed Chapter 13 plans called for a five-year commitment period under 11 U.S.C. 1325 and for repayment of 401(k) loans before completion of the commitment periods. Rather than calling for an increase in plan payments to the Chapter 13 trustee for the benefit of unsecured creditors once that repayment was complete, the plans proposed that debtors begin making contributions to their 401(k) retirement plans. The trustee filed objections. The bankruptcy court held that because 11 U.S.C. 541(b)(7) excludes contributions to a 401(k) plan from property of the estate and disposable income, debtors were allowed to exclude proposed 401(k) contributions from disposable income. The Bankruptcy Appellate Panel ruled in favor of the Trustee. The Sixth Circuit affirmed. Post-petition income, available to debtors after 401(k) loans are fully repaid, is "projected disposable income" that must be turned over to the trustee for distribution to unsecured creditors under 11 U.S.C. 1325(b)(1)(B) and may not be used to fund voluntary 401(k) plans. View "Seafort v. Burden" on Justia Law

In this case, the district court found that plaintiff's claims against defendant were preempted by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., because they arose under defendant's Pension Plan (Plan) and not separately and independently out of plaintiff's written employment agreement (Agreement). On appeal, plaintiff argued that the additional benefits he sought were based on a promise separate and independent from the Plan. The court held that the district court properly denied plaintiff's motion to remand the case to state court because plaintiff's state law claims were preempted by ERISA where the Agreement merely described the benefits plaintiff would receive as a Plan member and it made no promises of benefits separate and independent from the benefits under the Plan. The suit was properly removed to federal court, the district court had federal jurisdiction over the case, and remand to state court was not warranted. The district court properly dismissed plaintiff's action for failure to state a plausible claim. Finally, the court considered plaintiff's remaining arguments and concluded that they were without merit. Accordingly, the court affirmed the judgment of the district court. View "Arditi v. Lighthouse Int'l" on Justia Law