Opinion ID: 2745041
Heading Depth: 2
Heading Rank: 2

Heading: The Amendments to the Plan

Text: In 2005, GSUSA chartered 312 councils until it decided to restructure its organizational composition by merging or combining many of the councils into 112 councils, in a process it called the “Realignment.” In so doing, GSUSA merged councils that did not participate in the Plan with participating councils and enabled approximately 1,850 nonparticipating employees to become eligible to receive a lifetime pension annuity benefit without having previously contributed to the Plan. In 2006, GSUSA amended the Plan to include the Voluntary Early Retirement Incentive Plan (“VERIP”). The amendment permitted participants to subsidize and accelerate eligibility No. 13-6347 Girl Scouts of Middle Tenn. v. Girl Scouts of United States Page 4 for their pensions. Eligible consolidated councils could offer their employees the option to terminate employment and receive “enhanced benefits” under the Plan.1 GSMT argues that as a result of the Realignment and the VERIP amendment, GSUSA caused GSMT to incur massive new liabilities. As of January 2007, the Plan was operating with a surplus of over $150 million, but by September 2011, the Plan had accumulated a deficit close to $340 million. GSUSA contends that the deficit resulted from the country’s recession. To compensate for the shortage, GSUSA implemented a structured increase of its councils’ contribution rates. For GSMT, from 2000 until 2008, GSUSA applied a contribution rate of 3%, but increased the rate to 3.8% in 2009, 9% in 2010 and 2011, and 10% in 2012. The rate is scheduled to continue to increase through 2023, at which point it is expected to reach between 10% and 16%. Despite GSUSA’s deficit, GSMT was one of eighteen councils operating at a surplus in 2010. In February 2011, GSMT, through its counsel, notified GSUSA that it intended to withdraw from the Plan and form a spin-off retirement plan. After several communications between counsel for GSUSA and GSMT, GSUSA finally informed GSMT that it would not grant GSMT permission to withdraw or form the proposed spin-off.