Employers dodged a high-powered bullet in mid-June when a unanimous Supreme Court overturned the 9th Circuit Court of Appeals’ decision in Beck v. PACE International Union. The decision means companies opting to terminate an ERISA pension plan do not have to consider invitations to merge the plan with a union pension fund as an alternative to termination. Merging a plan often means the original plan sponsor forfeits any pension surpluses.
“The implications of the 9th Circuit’s decision would have been pretty bad because it suggested the implementation of administrative decisions, even if they were [sponsor] functions of employers, invoked a fiduciary duty,” says Heidi Winzeler, counsel at Osler Hoskin & Harcourt.
