Can an ERISA retirement plan, after having paid out a consistent pension to early retirees, later reduce those pensions based on the age at which the pensioners retired? Not without violating ERISA's anti-cutback rule, the Third Circuit ruled last Wednesday.
The case, Cottillion v. United Refining Company, involved pensioned retirees who began collecting before they were 65. After several years of pension payouts, United amended the plan to reduce, based on an actuary assessment, payments for early retirees. The court found this not only an impermissible interpretation of the plan's terms, but a violation of ERISA, the law governing employee retirement plans.