U.S. Supreme Court hears Xerox pension arguments
A legal fight regarding Xerox Corp. retirement benefits is now in the hands of the U.S. Supreme Court.
The nation’s highest court last week heard oral arguments in an appeal of a Second U.S. Circuit Court of Appeals ruling in 2008. The case, Conkright v. Frommert, revolves around a 1999 lawsuit filed in U.S. District Court by Xerox employees and retirees who claimed a company policy hacked their retirement benefits to a fraction of their former value.
The policy had to do with how to calculate the pensions of workers who left Xerox, received a lump-sum retirement payment, and then returned to Xerox and began earning retirement benefits again.
Xerox has maintained that the lump-sum amount, plus interest, should be subtracted from the value of the pensions of rehired workers.
But the Supreme Court appears to be looking at legal jurisdiction issues — specifically whether the Second Circuit was wrong when it decided a U.S. District Court doesn’t have to defer to an interpretation of the terms of a retirement plan made by an Employee Retirement Income Security Act administrator.
That issue was the focus of the justices’ questioning of an attorney representing the retirees. The point was made that courts, in most cases, defer to plan administrators’ interpretations.
In their questioning of an attorney representing Xerox, the justices focused on whether a court’s only power — if it feels an ERISA plan administrator has made a mistake — is to keep rejecting findings by that administrator rather than devising terms itself.
