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By Staff Report
Jun. 11, 2007
The U.S. Supreme Court ruled Monday, June 11, that corporate pension plan sponsors are free to terminate their plans even if the union representing a company’s workers offers to merge the company’s plans with the union’s multiemployer plans.
At issue in the case, Beck v. PACE International Union, was PACE’s 2001 offer to merge 17 of the pension plans of Crown Paper Co. and its parent, Crown Vantage Inc.—which were liquidating assets in Chapter 11 bankruptcy proceedings at the time—with the union’s Taft-Hartley PACE Industrial Union Management Pension Fund. Crown’s board rejected the union’s offer, opting instead to purchase an $84 million annuity that would result in the company getting a $5 million surplus after satisfying its obligations to plan participants and beneficiaries.
“Merger is not a permissible form of plan termination under ERISA,” the high court said in a decision written by Justice Antonin Scalia.
Filed by Pensions & Investments, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
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