## Facts

- Central Laborers’ Pension Fund administered a multiemployer defined-benefit pension plan that offered a subsidized early retirement “service-only” pension.
- When Thomas Heinz (and similarly Richard Schmitt) retired in the mid-1990s, the plan suspended service-only pension payments if a retiree engaged in specified “disqualifying employment,” defined then as work “as a union or non-union construction worker,” not including supervisory work.
- Heinz accepted post-retirement employment as a construction supervisor, and the plan continued paying his early retirement benefits under the existing definition.
- In 1998, the plan amended the definition of “disqualifying employment” to include work “in any capacity in the construction industry,” which the Fund interpreted to include supervisory positions.
- After notifying Heinz that continued supervisory work would trigger suspension, the Fund suspended his monthly pension payments when he kept working.
- Heinz and Schmitt sued to recover the suspended benefits, alleging the amendment violated ERISA’s anti-cutback rule, 29 U.S.C. § 1054(g).

## Issues

1. Whether ERISA § 204(g) prohibits a plan amendment that expands post-retirement employment categories triggering suspension of payment of already-accrued early retirement benefits.
2. Whether materially stricter conditions on receiving an early retirement benefit constitute a prohibited “reduction” of that benefit even if the nominal monthly amount is unchanged.

## Decision

- The Supreme Court unanimously affirmed the Seventh Circuit.
- ERISA § 204(g) barred applying the 1998 amendment to previously accrued early retirement benefits because it imposed a new, materially greater condition on receipt of those benefits.
- The Court treated expanded suspension triggers as a practical reduction in the value of the promised benefit, notwithstanding that the benefit formula and monthly amount remained the same.
- The Court rejected the Fund’s arguments that changing only the suspension provision did not affect the accrued benefit, and that ERISA’s separate suspension-of-benefits provision allowed the amendment.

## Legal Principles

- ERISA § 204(g) prohibits plan amendments that have the effect of “eliminating or reducing” an early retirement benefit, retirement-type subsidy, or optional form of benefit with respect to benefits attributable to pre-amendment service.
- A plan reduces a protected benefit when it places materially greater restrictions on the receipt of an already-accrued benefit; a reduction can occur through tighter payment conditions as well as through lower payment amounts.
- ERISA provisions permitting certain suspensions of benefits do not create an exception to § 204(g)’s anti-cutback protection for already-accrued benefits.

## Conclusion

ERISA’s anti-cutback rule protects not only the stated amount of an accrued early retirement benefit but also the materially important payment conditions attached to it; a plan may not retroactively expand post-retirement work restrictions that suspend payment of benefits already earned.


Cent. Laborers’ Pension Fund v. Heinz, 541 U.S. 739 (2004)