## Facts

- On January 1, 1917, Lincoln Telephone & Telegraph Company (LT&T) issued a pamphlet titled “Plan for Employees’ Pensions, Disability Benefits and Death Benefits” and established a trust fund to pay plan benefits.
- LT&T alone funded the pension trust; employees did not contribute to it.
- The plan stated that employees who completed 20 years of service and reached age 55 had the right to receive a pension of $30 per month for life.
- The plan also stated that employees had no right to be retained in LT&T’s service and no right to pension benefits if their service was less than the specified minimum.
- Marjorie Twiss began working for LT&T in August 1917.
- Twiss worked for approximately 18 years and was discharged in 1935, when she was 38 years old.
- After the discharge, LT&T treated Twiss as ineligible for pension benefits because she had not met the plan’s age and service conditions.
- Twiss sued LT&T claiming she was entitled to pension benefits on a vested-rights theory.
- Twiss obtained a judgment of $1,273, and LT&T appealed.

## Issues

1. Did LT&T’s employer-funded pension plan create vested pension rights in an employee who was discharged before completing 20 years of service and reaching age 55?
2. Did the plan’s language stating employees had no right to be retained in service prevent any claim that LT&T was obligated to continue Twiss’s employment so she could qualify for a pension?

## Decision

- The Nebraska Supreme Court held that Twiss had no vested right to pension benefits because she did not satisfy the plan’s express eligibility conditions (20 years of service and age 55).
- The court rejected the claim that the plan limited LT&T’s ability to discharge employees or created a right to continued employment until pension eligibility was reached.
- The court reversed the judgment awarding Twiss pension recovery under the plan.

## Legal Principles

- An employer-funded, noncontributory pension plan may condition any enforceable right to payment on meeting stated eligibility requirements, such as minimum years of service and a minimum retirement age.
- When a pension plan expressly states that employees have no right to be retained in service and no right to benefits unless minimum conditions are met, a discharged employee who has not met those conditions does not have a vested right to plan benefits.
- A pension plan’s promise of benefits upon meeting future conditions does not, by itself, create a contract for permanent employment or restrict an employer’s right to terminate employment before the conditions are satisfied.

## Conclusion

Twiss worked for LT&T for about 18 years but was discharged well before the plan’s pension thresholds of 20 years of service and age 55. Because the plan conditioned entitlement on meeting those requirements and also stated employees had no right to continued employment and no right to benefits short of the minimum, the Nebraska Supreme Court concluded Twiss had no vested pension rights and reversed the award she had obtained under the pension plan.


Twiss v. Lincoln Telephone & Telegraph Co., 287 N.W. 620 (1939)