Opinion ID: 430879
Heading Depth: 2
Heading Rank: 1

Heading: The Reduction of Pension Benefits

Text: 3 Appellants comprise about 253 individuals who, until the summer of 1971, were employees of Brown at a paper products manufacturing plant in Portage, Michigan. Joint Appendix (J.A.) at 911. In June 1971, Brown sold the Portage plant to Georgia-Pacific. Appellants remained at the Portage plant and became Georgia-Pacific employees. 4 While working for Brown, appellants had participated in the Brown Company Pension Plan No. 1 (Brown Pension Plan). Because appellants, upon becoming Georgia-Pacific employees, would no longer accrue benefits under the Brown Pension Plan, the two companies provided for appellants' pensions in the purchase and sale agreement for the Portage plant. In article 7(b)(i) of the agreement, Georgia-Pacific agreed to enter into collective bargaining with appellants' representatives to substitute for the Brown Pension Plan either a new or an existing Georgia-Pacific plan. 1 In article 7(b)(ii), Georgia-Pacific promised to strive during collective bargaining to obtain retirement benefits for appellants comparable to benefits provided by the Brown Pension Plan. In article 7(b)(iii), Brown agreed to transfer to Georgia-Pacific appellants' pro rata share of money in the Brown Pension Plan, and Georgia-Pacific agreed to apply this transferred money to appellants' new pension plan. 5 Georgia-Pacific entered into a collective bargaining agreement with appellants in June 1971. J.A. at 1088-89. The agreement provided that appellants would participate in the Georgia-Pacific Midwestern Joint Pension Trust (Georgia-Pacific Pension Plan), which provided benefits comparable to the Brown Pension Plan. 2 Id. at 926 n. . In February 1972, the parties amended the Georgia-Pacific Pension Plan to make benefit reductions mandatory when fund assets became insufficient. 3 6 In March 1974, Georgia-Pacific announced that the Portage plant would be closed by June 30, 1974. J.A. at 593. By June 30, 1974, all production at the plant had ceased, and only two employees remained. Id. These two employees were terminated after completing plant closure between July 1 and July 3, 1974. Id. at 33, 593. 7 With plant closure came the cessation of contributions to the Georgia-Pacific Pension Plan. The pension plan trustees determined that existing pension plan assets would not be sufficient to pay appellants the amount provided by the plan. Accordingly, in compliance with the plan, supra note 3, the trustees in March 1975 reduced appellants' pension benefits from six dollars per month per year of service to one dollar and fifty cents per month per year of service. J.A. at 912. Appellants received immediate written notification of the pension benefit reduction. Id. at 917. 8