USCA1 Opinion
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 91-1542
RONALD W. CATERINO, ET AL.,
Plaintiffs, Appellants,
v.
J. LEO BARRY, ET AL.,
Defendants, Appellees.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Edward F. Harrington, U.S. District Judge]
___________________
____________________
Before
Breyer, Chief Judge,
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Cyr and Stahl, Circuit Judges.
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Anthony M. Feeherry with whom Marie P. Buckley and Goodwin,
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Procter & Hoar were on brief for appellants.
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Randall E. Nash with whom James T. Grady and Grady and Dwyer were
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on brief for appellees.
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November 12, 1993
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BREYER, Chief Judge. For more than thirty years,
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New England employees of United Parcel Service ("UPS") have
participated in the New England Teamsters and Trucking
Industry Pension Fund (the "Teamsters Pension Fund"). In
1986, a group of those employees decided they wanted to
leave the Teamsters Pension Fund. They hoped (through
collective bargaining) to secure their employer's assistance
in setting up a separate pension fund covering only UPS New
England employees.
The employees failed to bring about the creation
of a separate fund. And, they blame the Teamsters Pension
Fund trustees for that failure. In particular, they believe
that the trustees have thwarted their efforts to negotiate a
plan switch, not through direct opposition, but by refusing
to permit a transfer of any Teamsters Pension Fund assets to
any new pension fund that they, together with UPS, might
create. They brought this lawsuit against the trustees,
claiming, in relevant part, that the trustees' refusal to
transfer assets violates various laws, including certain
provisions of the Employee Retirement Income Security Act of
1974 (ERISA). See 29 U.S.C. 1104(a)(1), 1414(a).
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After a trial, the district court found in the
trustees' favor. The employees now appeal. They argue in
essence that the trustees, in refusing to transfer any
assets to a newly created fund, have violated the fiduciary
obligations that ERISA imposes upon them. We can find no
such violation, however; and, we affirm the judgment in the
trustees' favor.
I
Background
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A
The Teamsters Pension Fund
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The large, multiemployer Teamsters Pension Fund
pools contributions from nearly two thousand New England
firms. Eight trustees (four Teamster representatives and
four employer representatives) manage the fund, investing
the pooled money and paying guaranteed monthly benefits to
employees who retire. We have read the record with
considerable care to try to understand, from the testimony
and documents, as well as the briefs, how the Teamsters
Pension Fund works. Based on our understanding of the
record, we describe its significant features as follows.
First, employers contribute to the fund at a rate
that, in 1986, varied, among employers, between 36 cents and
$1.66 per employee working hour. The precise rate depends
upon the results of local collective bargaining. Each
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employer pays the collective-bargained hourly rate for every
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hour that any employee works, whether the employee who
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performs the work is young or old, part-time or full-time,
temporary or long-term.
Second, a retiring employee receives a pension
benefit in an amount defined by a schedule that varies
benefits depending primarily upon the employee's length of
service and upon his, or her, employer's contribution rate.
The schedule thus pays the same pension to two retirees who
have worked for the same number of years for employers who
contribute at the same rate. In 1986, for example, an
employee who worked for twenty-five years for an employer
who contributed $1.66 per hour (UPS' actual rate in 1986)
would receive a pension of $900 per month. The benefit
schedule imposes a minimum length of service (ten years as
of 1986, lowered to five in 1990); no employee is entitled
to any pension benefits until he has worked the minimum,
i.e., until his Fund benefits have "vested." The schedule
appears to set a maximum length of service as well (twenty-
five or thirty years, depending on retirement age). Once an
employee works the maximum number of years, additional work
done does not entitle him to any additional benefit.
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It is important to understand that the Teamsters
Pension Fund (like most "defined benefit" pension plans and
unlike "defined contribution" plans such as those of many
university employees) does not guarantee any employee that
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he will receive a pension that exactly reflects all the
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contributions made on behalf of that particular employee
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over the years (plus the investment income associated with
those contributions). As we have just said, an individual
employee who works more than the maximum number of years
loses the benefit of some contributions made in respect to
some of his work hours. More important, an employee who
leaves covered employment before his Fund benefits vest
loses the benefit of all contributions made in respect to
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his work. Less obviously, employees who are young also lose
the benefit of some contributions. For example, an employee
who works a certain number of years, say fifteen, between
the ages of forty and fifty-five (and then quits) receives
no more upon his retirement at sixty-five than an employee
who works the same fifteen years between the ages of fifty
and sixty-five; yet the contributions made on behalf of the
first employee are likely more valuable, for they have had
more time to accrue investment income before retirement age.
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This lack of a perfect fit between individual
contributions and individual benefits may reflect
administrative considerations. It may, for example, reflect
a judgment not to create discrepancies in benefit levels
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that turn solely upon the relation between investment market
performance and the time that an individual's contributions
are made. But, the most important reason for the imperfect
fit, as the Ninth Circuit has pointed out, is that the
"excess" contributions made in respect to some workers help
to assure that all workers (who work a reasonable number of
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years) will have a decent pension. "A modern defined
benefit pension plan pools contributions for all workers . .
. to provide reasonable pensions for workers who satisfy
reasonable eligibility standards. The formula necessarily
assumes [inter alia] that the pensions of a significant
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number of employees may never vest." Phillips v. Alaska
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Hotel and Restaurant Employees Pension Fund, 944 F.2d 509,
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517 (9th Cir. 1991) (citation omitted), cert. denied, 112 S.
_____ ______
Ct. 1942 (1992); see also Local 144 Nursing Home Pension
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Fund v. Demisay, 113 S. Ct. 2252, 2260 (1993) (Stevens, J.,
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concurring) ("That some portion of [some defined benefit
plan employees'] contributions will go to benefit [other]
employees . . . is, of course, in the nature of a
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multiemployer plan. Such plans . . . pool[] employer
contributions for the joint benefit of all participating
employees.").
At the same time, the plan retains an important
connection between an individual's contributions and that
individual's benefits. By tying benefit levels to years of
service and employer contribution rates, the Fund still
ensures that those employees who do not get the full benefit
of contributions made on their behalf get much of that
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benefit (at least if their pension rights have vested).
Third, the Teamsters Pension Fund is a
multiemployer plan. The fact that it is "multiemployer"
means the fund is large, thereby permitting trustees to
diversify investment risks and also lowering administrative
costs per pension dollar. Moreover, multiemployer
"reciprocity" permits a worker to change jobs, among
participating employers, without losing the benefit of past
contributions.
Finally, the Teamsters Pension Fund contains a
special feature -- a "no asset transfer" rule -- which the
UPS employees now challenge. That rule says:
If any employee or group of employees .
. . shall cease to be covered by the
Fund for any reason whatsoever, they
shall not be entitled to receive any
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assets of the Fund or portion thereof
nor shall the Trustees be authorized to
make any transfer of assets on behalf of
such employees.
New England Teamsters and Trucking Industry Pension Fund,
Agreement and Declaration of Trust, Article XII, section 9
(1958). According to the trustees, this seemingly absolute
prohibition is modified by the Trust Agreement's next
section. That section requires the trustees to interpret
and apply the Agreement
so as to be in full compliance with all
applicable provisions of law, including
the Employee Retirement Income Security
Act of 1974, as amended.
New England Teamsters and Trucking Industry Pension Fund,
Restated Agreement and Declaration of Trust, Article XII,
section 10 (1982).
B
This Case
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In 1986, a group of UPS employees learned that
they could dramatically improve the level of their pensions
were they, with UPS, to withdraw from the Teamsters Pension
Fund and create their own single-employer plan. That is
because, as confirmed in the findings of the district court,
UPS employs a relatively large number of temporary workers,
for whom the company contributes for every hour worked, but
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who leave the New England trucking industry before their
pensions vest. The UPS workforce also includes a large
percentage of younger workers. Thus, UPS' contributions
made on behalf of its employees contain a higher-than-
average amount of "excess" contributions. The Teamsters
Pension Fund, being a multi-employer fund, spreads the
benefits of such excess contributions among all participants
in the Fund. In a single-employer plan, the UPS employees
realized, they would not have to share their "excess" with
others. And unshared, UPS' $1.66 per hour contribution, as
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of 1986, could buy pensions of $2600 per month (instead of
$900 per month) for UPS employees who retired from UPS
service after twenty-five years. Alternatively, UPS, in a
single-employer plan, could fund the $900 per month pension
for employees retiring after 25 years with a contribution of
less than 70 cents (rather than $1.66) for every employee
hour worked.
The UPS employees' brief explains what happened
after they learned of the potential benefits of a single-
employer plan: "In an effort to remedy their inequitable
treatment within the Teamsters Fund, the UPS Participants
repeatedly petitioned their union leaders to negotiate
[through collective bargaining with UPS management] for a
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separate pension plan on their behalf" -- a plan, the record
indicates, that the employees assumed would involve a
transfer of some portion of Teamsters Pension Fund assets
and liabilities to the new fund. "However," the employees
add, "the UPS Participants' efforts to negotiate a separate
UPS pension plan [were] thwarted by the provision in the
Teamster Fund's governing documents which absolutely
prohibits any transfer of assets . . . ." Brief for
Plaintiffs-Appellants at 10.
"Thwarted" in their efforts to take assets from
the Teamsters Pension Fund, and thereby, in their view,
"thwarted" in their efforts to bring about the creation of a
new fund, the UPS employees filed suit against the trustees.
They asked the court either (1) to order the trustees to
create special benefit levels within the Teamsters Pension
Fund for UPS participants (to reflect, in whole or in part,
their favorable actuarial status), or (2) to loosen the
prohibition on asset transfers, thereby, in their view,
making it possible for them to negotiate a plan switch with
UPS management. They argued that the trustees' failure to
do one or the other violated various provisions of the Labor
Management Relations Act (LMRA), 29 U.S.C. 141 et seq.,
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and of ERISA. As we have said, after a trial, the district
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court entered judgment for the trustees. The employees now
appeal that judgment.
The UPS employees have simplified their claims on
appeal. They have abandoned their demand that the trustees
create a special level of benefits within the Teamsters
Pension Fund. They focus instead upon the trustees' rule-
based refusal to permit any transfer of assets to a new UPS-
only fund.
The passage of time has also simplified this
appeal. The Supreme Court has recently decided a case which
we awaited before deciding this appeal, namely Local 144
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Nursing Home Pension Fund v. Demisay, 113 S. Ct. 2252
________________________________________
(1993). Demisay involved LMRA- and ERISA-based challenges
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to a refusal, by trustees of a multiemployer pension plan,
to transfer assets to another plan. In its decision, the
Court barred the LMRA-based claims on jurisdictional
grounds, but it remanded (without deciding) the ERISA-based
claims. As a result of that decision, the UPS employees
concede that they "can no longer pursue a claim for relief
under [the applicable section of] the LMRA."
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The UPS employees now pursue their remaining
claim, namely that the trustees' rule-based refusal to
transfer assets violates ERISA.
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II
Standing
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We begin with the trustees' assertion that the
employees lack standing. They concede that the employees
may bring an ERISA action if they have been "adversely
affected by the act or omission of any party . . . with
respect to a multiemployer plan." 29 U.S.C. 1451(a).
They claim, however, that the employees have not been
"adversely affected" by the asset transfer prohibition
principally because, in the trustees' view, "UPS
participants could receive the same level of [pension]
benefits with or without a transfer of assets to a new
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single-employer fund." Brief for Defendants-Appellees at 34
(emphasis added). Insofar as we understand this somewhat
counter-intuitive argument, we cannot agree with it.
In evaluating the argument, we have kept
separately in mind two different groups of UPS employees.
In the first group are those employees who, were a switch to
occur, would not yet have any vested Teamsters Pension Fund
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rights but who will keep working for several years after the
switch (e.g., a UPS employee who worked, say, four years at
the time of the switch, and continues to work for more than
an additional year). Both sides agree that a new, UPS-only
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pension plan would need to give these employees (whom we
shall call "not-yet-vested employees") full credit for their
past years of Teamsters-Pension-Fund-related service (e.g.,
the plan would need to give the four-year employee fully
vested, five-year, rights after one more additional year of
work). Everyone also agrees, however, that the "no asset
transfer" rule means that the new fund would be left without
any assets to pay for these past service credits. The
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employees' counsel estimates the "loss of the UPS
Participants' unvested benefits" (which we take to mean the
cost of these past service credits) at approximately $5
million. Brief for Plaintiffs-Appellants at 10 n.1. The
trustees' figures, if anything, appear to place the figure
higher.
In the second group are those employees who, were
a switch to occur, would already have vested rights (we
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shall call them "already-vested employees"). Everyone
agrees that a new, UPS-only fund would not have to pay
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pensions reflecting the past years of service of these
already-vested employees, for those pension rights would
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remain the legal responsibility of the Teamsters Pension
Fund. (In practice, the old fund pays supplemental pension
benefits directly to the employee after retiring.) Since a
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new fund would not have to pay for these employees' past
years of service, it would not need assets to help it make
any such payments. And, thus, the new fund would be
somewhat indifferent to the presence of the trustees' "no
asset transfer" rule. The employees recognize this point,
which is why they suggest they would ultimately ask only for
the approximately $5 million -- or some portion thereof --
they claim it would cost to pay the past service credits of
the not-yet-vested employees.
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With this distinction in mind, we have turned to
the trustees' "no standing" argument. The argument depends
upon a table (entitled "Transfer of Assets and Liabilities
Vs. No Transfer -- Hancock Numbers") that seems designed to
show that, if asset transfers were permissible, the
following would occur: (1) the new fund would assume all
pension liability for the already-vested employees; (2) it
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would obtain assets from the old fund to help pay that
(already-vested employee) liability; but, (3) for reasons
having to do with the inadequate funding of the Teamsters
Pension Fund as a whole, these assets would fall far short
of the amount needed to pay for the already-vested
employees; (4) the asset shortfall (in respect to already-
vested employees) would more than outweigh any benefit to
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the new fund through its obtaining a share of the (roughly)
$5 million of assets in respect to the not-yet-vested
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employees' pensions; (5) the rules related to UPS'
"withdrawal liability" (a complicated statutory requirement
that employers who leave a multiemployer plan pay a fair
share of the fund's overall deficit) would then somehow even
things out, so that UPS would be neither better nor worse
off with a transfer of assets than without one.
The problem with the table is that we cannot
understand the reasoning that underlies it. The trustees
nowhere explain why a new fund could not request a transfer
only of assets related to not-yet-vested benefits (and
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simply not bother with a transfer of assets, and
liabilities, related to vested benefits). And, so long as
the employees limit their request in this, or some similar
way, it seems plain to us that a rule blocking the transfer
of any assets means a poorer fund. We assume, therefore,
that the employees have standing, and we proceed on that
basis.
III
Fiduciary Obligations Under ERISA
_________________________________
The UPS employees' basic argument is that the trustees,
in maintaining a "no asset transfer" rule, have violated the
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fiduciary obligations that ERISA imposes upon them. Those
obligations are "strict." NLRB v. Amax Coal Co., 453 U.S.
____ ______________
322, 332 (1981). The trustees must discharge their duties
"with respect to a [multiemployer] plan solely in the
interest of the participants and beneficiaries and . . . for
the exclusive purpose of providing benefits to participants
and beneficiaries," and they must do so "with [] care,
skill, prudence, and diligence." See ERISA, 29 U.S.C.
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1104(a)(1); see also id. 1106 (describing other fiduciary
___ ____ ___
duties of trustees). At the same time, where, as here,
there is no claim of trustee self-dealing or the like, we do
not simply substitute our judgment for that of the trustees.
We review the trustees' decision at a distance. See Mahoney
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v. Board of Trustees, 973 F.2d 968, 970-73 (1st Cir. 1992)
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(refusing to apply close scrutiny to a pension fund trustee
decision even where mild self-dealing was involved); cf.
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Unocal Corp. v. Mesa Petroleum Co., 493 A.2d 946, 958 (Del.
_____________ ___________________
1985) ("[U]nless it is shown by a preponderance of the
evidence that the [fiduciaries'] decisions were primarily
based on perpetuating themselves in office, or some other
breach of fiduciary duty such as fraud, overreaching, lack
of good faith, or being uninformed, a Court will not
substitute its judgment for that of the [fiduciaries].").
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The decision to maintain a "no asset transfer" rule requires
the trustees to balance obligations that run both to
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employees who may wish to leave the fund and to those who
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wish to stay. As is well-established, courts set aside this
type of trustee management decision only if it is "arbitrary
and capricious in light of the trustees' responsibility to
all potential beneficiaries." Clearly v. Graphic
_______ _______
Communications Int'l Union Supplemental Retirement and
____________________________________________________________
Disability Fund, 841 F.2d 444, 449 (1st Cir. 1988) (citing
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other First Circuit cases on point).
We cannot say that the trustees' decision here is
arbitrary. In reaching this conclusion, we have considered
two possible arguments. The first (implicit in much of what
the UPS employees say) is that the Teamsters Pension Fund
has treated them unfairly while they have remained in the
Fund by not giving them higher pension benefits than other
employee groups with less favorable actuarial
characteristics. On this view, the sole fact that they were
earning (as of 1986) a $900 pension when they could have
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been earning a $2600 pension had the Fund treated them as a
separate actuarial group demonstrates this unfairness. And,
arguably, this "unfair" treatment warrants some special
transfer of assets should they leave the Fund.
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The problem with this argument is that the
discrepancy between $900 and $2600 does not, by itself,
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indicate that the Teamsters Pension Fund treated the
employees unfairly (and nor have the employees offered any
other evidence of unfair treatment while in the Fund). As
discussed above, see supra pp. 6-7, multiemployer, defined-
___ _____
benefit pension funds provide their participants a whole
cluster of benefits, most notably, a guaranteed decent
pension for all longtime workers. And as also discussed
above, such funds do this largely by collecting "excess"
contributions in respect
to certain kinds of employees such as temporary workers
(whose benefits never vest), young workers, and super-
longterm employees, and by sharing these excess
contributions with all the employees in the fund, not just
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with the employees of employers who paid the excess.
Accordingly, a basic objective of these funds would be
undermined if every employee group (such as UPS) with a
disproportionate share of excess contributions (and there
may be many others) wanted special pension levels to reflect
that fact. It is thus no coincidence that, according to the
findings of the district court, no other regional Teamster
pension fund provides special benefits for actuarially
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favorable employee groups, and only one non-Teamster fund in
the entire country does so.
In short, UPS and its employees could have quit
the Teamsters Pension Fund at any time, but so long as they
stayed -- and enjoyed the guaranteed, mobile pension
benefits the Fund provides -- there seems nothing obviously
unfair in denying them special (e.g., $2600) benefits. The
UPS employees, by abandoning on appeal their demand for such
benefits, seem, in effect, to concede the point. (We add
that, on appeal, the UPS employees also seem to suggest that
a new fund would not be entitled to an amount of assets
anywhere near as large as the amount that would reflect the
UPS employees' "excess" contribution.)
The second basic argument that the trustees have
acted arbitrarily focuses on the "no transfer" rule. The
employees argue that if they quit the Teamsters Pension Fund
(because they no longer, in the future, want to share their
excess contributions), the rule would prevent them, as
explained in the standing section, supra Part II, from
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getting any assets to help pay for the past service credits
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of the not-yet-vested employees. And, it would prevent the
new fund from getting such assets even though UPS has
dutifully made contributions into the old fund on behalf of
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these same employees. This, they say, is unfair. The UPS
employees concede, again as mentioned in the standing
section, that the "no transfer rule" is a wash with respect
to already-vested employees and, to that extent, the rule is
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not unfair. They also recognize that, as long as the
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Teamsters Pension Fund has liabilities in excess of its
assets, they might not be entitled to get funds to cover all
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of the past service credits of not-yet-vested employees; yet
they say they are entitled to funds to cover at least some.
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Can the trustees' decision not to transfer even
one dime of the Fund's assets attributable to not-yet-vested
pension rights (keeping those assets for the benefit of
other non-UPS participants) be considered reasonable?
Although we find the question a difficult one, we believe
the answer is "yes" -- at least in the absence of some
special circumstance that the record here does not reveal.
In arriving at this conclusion, we fully recognize that the
trustees' blanket refusal operates in practice like a
penalty for withdrawing from the Fund -- a penalty somewhat
similar to the penalties bank customers pay for early
withdrawals from CDs and the like, but a penalty
nonetheless. Whether such a penalty is reasonable depends,
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in our view, upon whether it serves a legitimate deterrent
purpose, upon whether the participants in the fund know
about it in advance, and upon its size in relation to its
function.
The penalty's deterrent function here is
legitimate. Multiemployer, defined-benefit pension plans
almost inevitably produce some actuarially-favored, and some
actuarially-disfavored, groups. Such plans have a strong
interest in discouraging actuarially-favored employee groups
from withdrawing. For the employees left behind, withdrawal
means, among other things, a smaller fund, consequently
greater investment costs and risks, and fewer employers for
whom those employees can work without losing their accrued
years of service. Those left behind, moreover, also lose
the benefit of sharing the departing employer's "excess"
contributions, say, those related to temporary employees.
Some departing employees, we should remind them, would be in
the same situation had personal circumstances earlier led
them to switch to actuarially-disfavored employers. Also,
departing employees, up until the time of departure, have
enjoyed the benefits of the large fund that departure
disincentives have helped to maintain.
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Moving to the next inquiry, we think that
employees leaving the Fund might reasonably expect to incur
some such departure penalty (not to be confused, by the way,
with "withdrawal liability," mentioned supra pp. 14-15).
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The governing document of the Teamsters Pension Fund has
contained the "no asset transfer" clause since the Fund's
creation. More importantly, the penalty concerns the loss
of a special kind of asset, namely the loss of assets
related to not-yet-vested contributions. And, participants
in many pension funds normally lose such assets entirely
when they leave fund-covered employment prior to vesting.
Departing employees leave Teamsters Pension Fund-covered
employment whether they quit the industry or whether, by
switching plans, they and their employer leave the Teamster
Pension Fund. Of course, the two activities -- quitting a
job and switching plans -- are not the same. But, they are
closely enough related to make the penalty of an
unsurprising kind (and, of course, from the point of view of
the remaining participants, the effect of departure is the
same).
It also seems to us that the size of the
withdrawal penalty is relatively modest. The record
suggests that the employees can take advantage of their
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actuarially favorable position by leaving the Teamster Fund
even without an asset transfer, albeit not quite to the same
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degree. In absolute terms, we have already mentioned that
the employees appear to value the not-yet-vested employee
liability at roughly $5 million; we have also already
mentioned that the employees recognize that they would be
entitled, the Teamsters Pension Fund being in debt, to an
amount of assets to cover only some, not all, of this
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liability -- i.e., an amount less than $5 million, perhaps
much less. (Our own crude calculations, based on figures
from the trustees' table, puts the amount at $3.7 million.)
Whatever the exact figure, it is a fairly small amount
compared to other amounts such as UPS' annual contributions
($18 million dollars as of 1986, according to the employees'
actuaries) or the "withdrawal liability" UPS would likely
have to pay upon departure (in the tens of millions of
dollars, again as of 1986).
Finally, if the "no asset transfer" rule costs the
new fund too much, there is a safety valve. The employees
can automatically entitle themselves to a share of fund
assets should the matter become so critically important to
them that they take the drastic step of changing collective
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bargaining representatives (i.e., of leaving the Teamsters).
See ERISA, 29 U.S.C 1415(a).
___
Ultimately, the weighing of the conflicting
interests here at issue -- those of departing employees in
obtaining the nonvested share of assets versus those of most
fund participants in discouraging departures -- is up to the
trustees (who reflect the interests both of employers and
the employees, through their collective bargaining
representatives). The question is close enough so that, in
our view, the ultimate weighing is not up to the courts.
The treatment of the departing employees (that they must
forfeit unvested rights) is not so unfair as to make the
rule arbitrary. We do not say that any rule that blocks
___
asset transfers is reasonable, nor that the present "no
transfer" rule is reasonable in all circumstances. We
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simply say that the record before us does not demonstrate
that it is arbitrary as applied to the circumstances before
us. Thus, we do not find a violation of the basic fiduciary
obligations that ERISA imposes upon trustees.
IV
ERISA Section 4234(a)
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The UPS employees also claim that the "no asset
transfer" rule violates ERISA section 4234(a), which says,
in relevant part, that
[a] transfer of assets from a
multiemployer plan to another plan shall
comply with asset-transfer rules which
shall be adopted by the multiemployer
plan and which . . . do not unreasonably
restrict the transfer of plan assets in
connection with the transfer of plan
liabilities.
29 U.S.C. 1414(a). They argue (1) that the provision is
applicable to the instant case, (2) that the trustees have
failed to "adopt[]" any "asset-transfer rules," and (3) that
any such rules they might have adopted are "unreasonably
restrict[ive]."
The trustees do not agree that the provision
applies to this case. Specifically, they argue that it
applies only where a fund's trustees intend to transfer some
of its liabilities -- not the situation here -- and the
question is whether, or to what extent, the trustees must
allow assets to accompany the transferred liabilities. This
is the interpretation of the statute that the Third Circuit
has endorsed, and with which, for the reasons stated in that
opinion, we agree. See Vornado, Inc. v. Trustees of The
___ _____________ ________________
Retail Store Employees' Union Local 1262, 829 F.2d 416 (3d
_________________________________________
Cir. 1987).
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Even assuming that the provision applies, however,
we cannot accept the employees' claim that the trustees have
failed to "adopt[]" any "asset-transfer rules." The "no
asset transfer" is itself a rule about asset transfers.
______
Moreover, that rule is not quite as absolute as it sounds,
for the trustees acknowledge that, if ERISA's fiduciary duty
rules require them to transfer assets, the rule permits them
to comply. The Trust Agreement itself, in Article XII,
section 10, says that they must do so. See supra p. 8.
___ _____
Further, the asset transfer prohibition, as so interpreted,
is not "unreasonably restrict[ive]," for the very reasons we
have set forth in Part III, supra.
_____
For the reasons stated, the judgment of the
district court is Affirmed.
Affirmed
________
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