Also known as: pensio · pensions · pensioner · pensioners · annuity · retirement benefit
Written by attorneys — see sources below.
A fixed sum paid regularly to a person or the person's beneficiaries, especially by an employer as a retirement benefit. The term also encompasses the underlying plans and trusts that fund such payments for current or former directors, officers, employees, and agents.
Premier Manufacturing's board votes to establish a pension plan for its employees. The corporation uses its statutory power to fund the plan with regular contributions that will provide fixed retirement payments to workers after they leave the company. The plan satisfies the requirement that the payments benefit current and former employees.
A disabled veteran petitions the Secretary of War for placement on the federal pension list after Congress authorizes payments for wartime service. The court considers whether mandamus lies to compel the executive officer to act on the claim. The pension right turns on compliance with statutory procedures rather than executive discretion alone.
In December 1801, William Marbury, Dennis Ramsay, Robert Townsend Hooe, and William Harper petitioned the Supreme Court for a rule requiring Secretary of State James Madison to show cause why a writ of mandamus should not issue commanding delivery of their commissions as justices of the peace in the District of Columbia. The applicants had been nominated by outgoing President John Adams. The Senate had advised and consented to the appointments. Commissions in due form were signed by the President with the seal of the United States affixed by the Secretary of State. During the proceedings the Court heard testimony from Department of State clerks Jacob Wagner and Daniel Brent, who described the preparation and handling of the commissions. Wagner recalled that two commissions had been signed but could not confirm whether those of the applicants were recorded. Brent believed Marbury's and Hooe's commissions were made out. Ramsay's was omitted by mistake. None of the Adams-signed commissions for District justices were recorded. Attorney General Levi Lincoln, who had acted as Secretary of State, testified that he had seen signed and sealed commissions but did not know whether any for the applicants were ever sent out. James Marshall's affidavit stated that on March 4, 1801, he received and later returned several commissions from the Secretary of State's office, including those for Hooe and Harper. The applicants also submitted the affidavit of Hazen Kimball confirming that commissions for Marbury and Hooe were in the office on March 3, 1801. Madison did not appear or show cause after the rule was served. The motion for the writ itself was heard in the February 1803 term.
View caseDavid Egelhoff designates his wife Donna as beneficiary of his Boeing pension plan and life insurance policy. After their divorce, David dies without changing the designation. State law automatically revokes the ex-spouse designation, but ERISA preempts that rule for the ERISA-governed pension, so Donna receives the benefits.
Donna Rae Egelhoff was married to David A. Egelhoff. Mr. Egelhoff was employed by the Boeing Company, which provided him with a life insurance policy and a pension plan. Both plans were governed by ERISA, and Mr. Egelhoff designated his wife as the beneficiary under both. In April 1994, the Egelhoffs divorced. Just over two months later, Mr. Egelhoff died intestate following an automobile accident. At that time, Mrs. Egelhoff remained the listed beneficiary under both the life insurance policy and the pension plan. The life insurance proceeds, totaling $46,000, were paid to her. Respondents Samantha and David Egelhoff, Mr. Egelhoff's children by a previous marriage, are his statutory heirs under state law. They sued petitioner in Washington state court to recover the life insurance proceeds. In a separate action, respondents also sued to recover the pension plan benefits. The trial courts, concluding that both the insurance policy and the pension plan "should be administered in accordance" with ERISA, granted summary judgment to petitioner in both cases. The Washington Court of Appeals consolidated the cases and reversed. Applying the statute, it held that respondents were entitled to the proceeds of both the insurance policy and the pension plan. The Supreme Court of Washington affirmed. Courts have disagreed about whether statutes like that of Washington are pre-empted by ERISA. The Supreme Court granted certiorari to resolve the conflict.
View caseGeorge Eldridge receives Social Security disability benefits that include references to his private pension income. The agency terminates benefits after an administrative review without an evidentiary hearing. The Court weighs the private interest in continued pension-linked income against the government's interest in efficient administration when deciding what process is due.
George Eldridge was first awarded Social Security disability benefits in June 1968. In March 1972 he received a questionnaire from the state agency charged with monitoring his medical condition. He completed and returned the questionnaire, indicating that his condition had not improved and identifying recent medical sources. The state agency obtained reports from his physician and a psychiatric consultant. After reviewing those reports and other information in his file, the agency sent Eldridge a letter stating that it had made a tentative determination that his disability had ceased in May 1972. The letter included a statement of reasons for the proposed termination and advised Eldridge that he could request time to submit additional information. Eldridge responded in writing, disputing one characterization of his medical condition and asserting that the agency already possessed sufficient evidence of his disability. The state agency then made a final determination that Eldridge had ceased to be disabled in May 1972; the Social Security Administration accepted that determination. In July 1972 Eldridge received written notice that his benefits would terminate after that month and that he could seek reconsideration by the state agency within six months. Instead of requesting reconsideration, Eldridge filed suit in the United States District Court for the Western District of Virginia. He challenged the constitutionality of the Secretary's termination procedures and sought an injunction barring termination of benefits until a pretermination evidentiary hearing was provided, together with immediate reinstatement of benefits. The District Court held that the existing procedures violated the Fifth Amendment's Due Process Clause, ordered the Secretary to provide Eldridge a pretermination hearing, and directed reinstatement of benefits pending that hearing. The Court of Appeals for the Fourth Circuit affirmed. The Supreme Court noted probable jurisdiction and heard the case.
View caseCongress enacts a statute allowing a concurrent resolution to disapprove schedules that would increase premiums for the Pension Benefit Guaranty Corporation. The Chadha decision examines whether such legislative veto provisions violate separation of powers. The pension-related rule illustrates one of many statutes using the concurrent-resolution mechanism.
In 1966 Jagdish Rai Chadha, an East Indian born in Kenya who held a British passport, was lawfully admitted to the United States on a nonimmigrant student visa that expired on June 30, 1972. In October 1973, the District Director of the Immigration and Naturalization Service informed Chadha that he had remained longer than permitted and was therefore deportable. Chadha conceded deportability but applied for suspension under section 244(a)(1) of the Immigration and Nationality Act of 1952. On June 25, 1974, an Immigration Judge acting on behalf of the Attorney General suspended Chadha's deportation and adjusted his status to permanent resident after finding that he satisfied the statutory criteria of seven years' continuous presence, good moral character, and extreme hardship. A report of the suspension was transmitted to Congress as required by the Act. On December 16, 1975, the House of Representatives passed a resolution disapproving the suspension for Chadha and five other aliens on the ground that they did not meet the statutory requirements, particularly as to hardship. Pursuant to the House resolution, the Immigration Judge reopened the deportation proceedings. Chadha moved to terminate them on constitutional grounds, but the Immigration Judge ruled that he lacked authority to declare the resolution unconstitutional and ordered Chadha deported. Chadha appealed to the Board of Immigration Appeals, which likewise held that it had no authority to pass on the constitutionality of the resolution and dismissed the appeal. Chadha then filed a petition for review in the United States Court of Appeals for the Ninth Circuit. The Immigration and Naturalization Service appeared and urged the court to hold the House resolution unconstitutional. After inviting briefs from the Senate and House as amici curiae, the Court of Appeals held the resolution unconstitutional because it was a legislative act that failed to satisfy the requirements of Article I, sections 1 and 7, and set aside the deportation order. The Supreme Court granted certiorari in the consolidated cases to address the constitutional question.
View caseA corporation funded partly through employee pension plans runs television ads supporting a political candidate. Shareholders who hold stock only through mutual funds and pension intermediaries have limited ability to monitor or object to the expenditures. The decision addresses whether the First Amendment protects such corporate advocacy.
Citizens United is a nonprofit corporation with an annual budget of about $12 million. Most of its funds come from donations by individuals, though it accepts a small portion from for-profit corporations. In January 2008, Citizens United released a 90-minute documentary film entitled Hillary: The Movie. The film mentions Senator Hillary Clinton by name and depicts interviews with political commentators, most of them critical of her. Hillary was released in theaters and on DVD, but Citizens United wanted to increase distribution by making the film available through video-on-demand. In December 2007, a cable company offered to make Hillary available on a video-on-demand channel called Elections '08 for a payment of $1.2 million. The proposal was to make the film available to viewers free of charge. To promote the video-on-demand offering, Citizens United produced two 10-second ads and one 30-second ad. Each ad includes a short statement about Senator Clinton followed by the name of the movie and the movie's website address. Citizens United desired to promote the offering by running the advertisements on broadcast and cable television within 30 days of primary elections. Before the Bipartisan Campaign Reform Act of 2002, federal law prohibited corporations from using general treasury funds to make independent expenditures that expressly advocate the election or defeat of a candidate in connection with certain federal elections. BCRA §203 amended the law to prohibit any electioneering communication. An electioneering communication is any broadcast, cable, or satellite communication that refers to a clearly identified candidate for federal office and is made within 30 days of a primary or 60 days of a general election when publicly distributed so that it can be received by 50,000 or more persons in a relevant state. Concerned about possible civil and criminal penalties for violating 2 U.S.C. §441b, Citizens United filed suit in the United States District Court for the District of Columbia in December 2007. It sought declaratory and injunctive relief, arguing that §441b is unconstitutional as applied to Hillary and that BCRA's disclaimer, disclosure, and reporting requirements are unconstitutional as applied to Hillary and the ads. The District Court denied Citizens United's motion for a preliminary injunction and granted the Federal Election Commission's motion for summary judgment. The Supreme Court noted probable jurisdiction. The case was reargued after the Court requested supplemental briefs addressing whether Austin v. Michigan Chamber of Commerce and the relevant portion of McConnell v. Federal Election Commission should be overruled.
View caseERISA preempts state laws that automatically revoke an ex-spouse as beneficiary of an ERISA-governed pension plan upon divorce. The plan documents control, so the designated beneficiary remains entitled to the benefits even after divorce unless the plan itself is amended.
A court examines the parties' economic circumstances and any evidence of nondisclosure or undervaluation of pension assets at the time of signing. Substantial post-signing discovery that one spouse undervalued a pension can support a finding of unconscionability when it produces a markedly unfair division.
A corporation possesses express statutory power to pay pensions and establish pension plans for current or former directors, officers, employees, and agents. This authority allows the corporation to create and fund the plans as part of its ordinary business operations.
Pension and employee-benefit accounts with death benefits function as will substitutes and need not comply with will execution formalities. The beneficiary designation is valid upon the employee's death even though the employee retained lifetime control over the account.
…Congress and general principles of law. This view is not novel. In 1792 an act directing the Secretary at War to place on the pension list disabled officers reported by the circuit courts was deemed unconstitutional so far as it imposed duties on the courts, and after a repeal Congress provided a different mode and…