In Price v. Board of Trustees of Indiana Laborer’s Pension Fund, No. 11-4126 (6th Cir. 2013), the plaintiff, James Price (“Price”), had filed suit under ERISA against the defendants, the Board of Trustees of the Indiana Laborer’s Pension Fund (the “Board”) and the Pension Fund itself, after his disability benefits under the Pension Fund were discontinued.
The terms of the Pension Fund gave the Board the power to amend the Pension Fund retroactively. Price began to receive an “Occupational Disability Benefit” under the Plan in 2001. In 2004, the Board amended the Plan-retroactively- to terminate an Occupational Disability Benefit by December 31, 2006, if that benefit had started before 2005. This amendment caused Price’s benefit to cease at the end of 2006. Without the amendment, the benefit would not have ceased until Price reached early retirement age in 2012. Price later brought this suit, which challenged the validity of the amendment under ERISA.
In analyzing the case, the Court noted that ERISA does not create a substantive right to welfare benefits–such as the Occupational Disability Benefits–nor does ERISA establish a vesting requirement for welfare benefits. As such, a welfare benefit may be terminated at any time so long as the termination is consistent with the terms of the plan. In this case, the Pension Fund stated that “Any amendment to the Plan may be made retroactively by the majority action [of the Board] . . . . [N]o amendment shall be made which results in reduced benefits for any Participant whose rights have already become vested under the provisions of the Plan on the date the amendment is made.” The Board interpreted this provision to permit the amendment in question. The Court found that this interpretation of the Pension Fund was not arbitrary or capricious, and therefore must be upheld. As such, the Court concluded that the Board’s interpretation, and the amendment on which it was based, was valid. Thus, the Court ruled that the termination of Price’s Occupational Disability Benefit at the end of 2006 was correct.