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Court Awards Retiree Back Payments for Wrongly-Suspended Pension Payments

A big issue for retired construction workers and others in multiemployer plans has been whether they can get payments for years that their early retirement pensions were suspended before the U.S. Supreme Court ruled in 2004 that the suspensions were unlawful. The federal appeals court in New York has ruled that these retirees must receive benefits for the time their pension payments were wrongly suspended. Below is a quick summary of the case.

In 1998, after 30 years of work, Porter Swede retired from his job as a carpenter and began collecting his pension. He then went back to work in the supervisory position of office engineer. Under his pension plan’s rules he was allowed to continue receiving his pension while working in this supervisory position. Two years later, in 2000, the plan trustees changed the plan’s rules to suspend retirees’ pension payments if they worked in a supervisory position anywhere in the construction industry. As a result of this change in the plan’s rules, Porter’s pension payments were suspended. Four years later, the Supreme Court ruled that plans cannot change suspension rules after someone has retired. After this decision, the plan trustees gave Porter his improperly suspended benefits from 2004 on, but would not give him the payments they had withheld from him between the years of 2000 and 2004. Recently, in Swede v. Rochester Carpenters Pension Fund, the U.S. Court of Appeals for the Second Circuit ruled that the plan trustees must pay Porter his retroactive payments. While this case only benefits those bringing lawsuits in New York and Connecticut, it may be followed by courts in other parts of the country.