Also known as: pension benefit plan · pension benefits plan · pension plans · employee pension plans
Written by attorneys · grounded in primary & secondary sources — see below
Arrangements that provide retirement income or deferred compensation to current or former directors, officers, employees, and agents of a corporation. The plans may take the form of pension plans, pension trusts, profit sharing plans, share bonus plans, share option plans, or other benefit or incentive plans. Corporate statutes expressly authorize corporations to establish and fund such plans as part of their general powers to conduct business.
North Valley Hospital's board adopts a retirement pension plan that grants generous defined benefits to long-serving physician-directors while nurses receive only minimal contributions. The nurses' association sues, claiming the board exceeded corporate powers by favoring directors. The court rejects the claim because the statute expressly permits corporations to establish pension plans for directors as well as employees.
After Isaac Boggs dies, his first wife attempts to bequeath an interest in his undistributed pension plan benefits to their sons under state community property law. Isaac's second wife claims ERISA preempts the attempted transfer. The Supreme Court holds that ERISA prevents the state law from allowing the nonparticipant spouse to transfer an interest in the pension benefits.
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Congress enacts a statute that retroactively imposes substantial new funding obligations on Eastern Enterprises for pension benefits of miners who worked for the company decades earlier. Eastern argues the law violates the Contract Clause by impairing preexisting contractual arrangements. The Court finds the retroactive imposition substantially impairs the company's obligations without sufficient justification.
The Los Angeles Department of Water and Power requires female employees to contribute more to the pension plan than male employees because women on average live longer. Female employees sue, alleging sex discrimination in violation of Title VII. The Supreme Court holds that the differential contributions constitute unlawful discrimination because they are based solely on sex.
Knolls Atomic Power Laboratory lays off employees using a process that disproportionately affects older workers who are closer to pension eligibility. Laid-off employees sue under the Age Discrimination in Employment Act. The Supreme Court requires the employer to prove that the reasonable factors other than age defense applies to the challenged employment action.
Western Air Lines maintains a policy requiring pilots to retire at age sixty under a pension plan provision tied to federal aviation safety rules. Older pilots challenge the policy as age discrimination. The Supreme Court upholds the policy because the age limit is a bona fide occupational qualification reasonably necessary for safe operation of the airline.
Yes. The statute expressly authorizes corporations to pay pensions and establish benefit plans for any or all of their current or former directors, officers, employees, and agents. Nothing in the grant requires equal treatment or limits coverage to nonmanagement employees.
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Yes. The statute covers current or former directors, officers, employees, and agents. A retired manager who continues providing services as an independent sales representative qualifies as a former employee or agent eligible for pension and share bonus benefits.
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No. The power to establish pension and incentive plans is a default corporate power that exists unless the articles affirmatively restrict it. The board may rely on the statutory grant without specific authorization in the articles.
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…Income Security Act of 1974 (ERISA), 29 U. S. C. § 1001 et seq. , introduced specific funding and vesting requirements for pension plans. To comply with ERISA, the UMWA and the BCOA entered into a new agreement, the 1974 NBCWA, which created four trusts, funded by royalties on coal production and premiums based on hours…