First Circuit Holds that Retroactively Awarded Benefit is Subject to ERISA Anti-Cutback Rules

Four union pension plans had different methods for using ?Ç£banked hours?Ç¥ (i.e., hours worked which were in excess of those required to earn a full year of benefit service under the plan) to provide additional years of benefit service.?á When the plans merged, they were amended to use the same method for all four plans, resulting in a number of participants receiving retroactively increased benefits immediately after the merger.?á A number of years later, the union decided to rescind the retroactively increased benefits, claiming the anti-cutback rule of the Employee Retirement Income Security Act of 1974, as amended (?Ç£ERISA?Ç¥), did not apply to the gratuitous benefits increases attributable to prior banked hours. The U.S. Court of Appeals for the First Circuit upheld the federal district court?ÇÖs ruling that, for purposes of ERISA, the additional pension benefits granted retroactively became accrued benefits for purposes of ERISA and were therefore protected under the anti-cutback rules in ERISA Section 204(g). Bonneau v. Plumbers & Pipefitters Local Union 51 Pension Trust Fund, No. 13-1515 (1st Cir. Nov. 15, 2013).?á The opinion can be found here.