ERISA- Second Circuit Rules That Trustees of a Multiemployer Pension Plan Are Not Fiduciaries, Under ERISA, When They Amend The Plan

In Janese v. Shakarjian, Docket Nos. 11-5369-cv(L), 12-80-cv(XAP) (2nd Cir. 2012), the Court faced the issue (among others) of whether the trustees of a multiemployer pension plan (the “Plan”) act as fiduciaries for ERISA purposes when they amend the Plan. Multiemployer pension plans -including the Plan-may be amended by its trustees. The issue arose because the plaintiffs claim that certain amendments the trustees made to the Plan violated their fiduciaries duties under ERISA. If the trustees are not fiduciaries for ERISA purposes, however, they have no such duties and the plaintiffs’ claim fails.

The Court noted that it (the Second Circuit Court of Appeals) has previously ruled that, with respect to multiemployer pension plans, the act of amending a plan should be treated as a fiduciary function. Chambless v. Masters, Mates & Pilots Pension Plan (1985). The Court repeated this ruling in Siskind v. Sperry Retirement Program, Unisys (1995). However, the Court then said that those two cases have been abrogated by the combined effect of three decisions of the Supreme Court: Curtiss-Wright Corp. v. Schoonejongen (1995); Lockheed Corp. v. Spink (1996), and Hughes Aircraft Co. v. Jacobson (1999). The Court indicated that, in those cases, the Supreme Court made it clear that employers and plan sponsors do not act in a fiduciary capacity when they modify, adopt or amend single employer plans. Nothing in the Supreme Court’s decisions or ERISA itself creates a different rule for multiemployer pension plans. Thus, the Court concluded that-under law- the trustees in this case were not acting as fiduciaries for purposes of ERISA when they amended the Plan.

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