The U.S. Supreme Court has voted unanimously to allow multi-employer pension funds to charge higher so-called exit fees when companies withdraw from plans.
Justice Ketanji Brown Jackson wrote the court’s 9–0 opinion in M & K Employee Solutions LLC v. Trustees of the IAM National Pension Fund, which was issued on May 21.
Some employers come together to create multi-employer pension plans, often under a collective bargaining agreement with a labor union in which they contract to offer defined benefits. This is different from a defined-contribution plan, which has become increasingly common because employers view it as less risky.
Such plans are regulated by the Employee Retirement Income Security Act (ERISA), a federal statute that establishes minimum standards for most voluntarily created retirement and health plans in the private sector to protect employee benefits from potential mismanagement. Plan managers are required to act in the best interest of participants and can be exposed to personal liability if they fail to do so….