- The Washington Times - Monday, December 1, 2003


The Supreme Court said yesterday it will decide whether employers can cut back on pensions for some people who retire early from one job and then go to work somewhere else.

The case is one of two the court will decide before summer that balance workers’ rights against employers’ efforts to contain the rising cost of providing benefits.

Early retirement is a popular option for millions of private-sector workers, as well as military, law enforcement and other government employees. Many are eligible for pension benefits after 20 years or so.

Those benefits typically come with some strings, however, such as the requirement at issue in the appeal the high court has agreed to hear.

The case involves two Illinois construction workers who were eligible for full retirement benefits when they retired in 1996 at age 39. Thomas Heinz and Richard Schmitt Jr. were told they could draw retirement benefits so long as they did not take on certain jobs in the same industry.

Both men took new jobs as construction supervisors, jobs that at the time still allowed the men to collect pension benefits alongside their new paychecks. But the Central Laborers’ Pension Fund changed the rules in 1998 and told the men that they could not draw their pensions while working in any construction industry job.

Mr. Heinz and Mr. Schmitt sued, and a federal appeals court eventually ruled in their favor.

Jeffery Wilday, the attorney for the Central Laborers’ pension plan, said the fund changed its rules to try to prevent “double dipping” by employees who draw retirement and regular paychecks.

The fund noted that the early retirees did not lose their pension benefits altogether. The benefits are merely suspended while the men continue their present jobs, the fund’s attorneys told the high court.

The issue for the Supreme Court concerns federal legal protection for workers when a benefit plan makes such changes after the fact. The court’s ruling, expected by summer, applies directly to private-sector workers covered by group pension plans, although the court’s reasoning may have wider effect.

Pooled, or multiemployer, benefit plans are common in such industries as construction, trucking, mining, retail and manufacturing. About 9.5 million people were covered by such plans in 2002, according to federal data.

The case concerns traditional pension plans offered by employers, as opposed to the increasingly popular 401(k) plans.

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