ERISA-DC Circuit Rules That Participants In A Terminated Pension Plan Are Not Entitled To Plant Shut Down Benefits

In United Steel v. Pension Benefit Guaranty Corporation, No. 12-5116 (D.C. Cir. 2013), the district court had rendered judgment affirming a decision of the Pension Benefit Guaranty Corporation (the “PBGC”) that the participants in the Thunderbird Mining Company Pension Plan the (“Plan”) were not entitled to receive “shutdown” pension benefits. Those benefits are early retirement benefits which are-under the terms of the Plan- triggered by a permanent shutdown of a plant, and payable to Plan participants who meet certain age and years-of- service requirements.

In reviewing the case, the D.C. Circuit Court of Appeals (the “Court”) applied the arbitrary and capricious standard of review to the PBGC’s decision that Plan participants were not entitled to the shutdown benefits. It found that the case record provides sufficient support for the PBGC’s determination that a permanent shutdown had not occurred before Plan was terminated, so that no shut down benefits would be payable. The PBGCs determination, then, was not arbitrary or capricious. As such, the Court affirmed the district court’s judgment.

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