Benefits July 15, 2003

MA High Court Still Out on Gay Marriage

July 15, 2003 (PLANSPONSOR.com) - The Massachusetts Supreme Judicial Court has surpassed a self-imposed deadline for determining cases within 130 days in determining whether gays and lesbians can legally wed in the Bay State.
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The clerk for the court notified the 43 lawyers and two others who had submitted arguments in the case that the justices would miss their internal deadline for handing down the decision, something the high court does in about 10% of its cases each year. ”Usually when you see something like this, it’s indicative of a more complicated case or a case where there may not be a clear consensus,” said Martin Healy, general counsel for the Massachusetts Bar Association, according to a Boston Globe report.

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Complication and thoroughness are definitely the orders of the day for this case. The justices received 3,500 pages of legal briefs from lawyers and hundreds of groups on both sides of the controversial issue.

Peter Zupcofska, who helped write the Boston Bar Association’s friend-of-the-court brief supporting gay marriage, projected the wait will be short and that the Massachusetts high court may be taking time to digest the recent Supreme Court decision in the Texas sodomy case. He was hoping that would be a good sign for gay marriage supporters.

The case in question, Goodridge v. Department of Public Health , began in 2001 when seven same-sex couples sued the state Department of Public Health after they applied for marriage licenses and were denied. They argue that the Massachusetts Constitution’s guarantees of liberty and equality give them the right to wed partners of their choice.

A Suffolk Superior Court judge threw out the case before it was heard, ruling that the Legislature should decide the issue. The couples appealed, the case was heard in March, and as of yet no notice on when it will hand down its decision has been given.

Benefit Impact

The impact to employee benefit plans, both in Massachusetts and across the country, could be seismic. As more and more United States em ployers begin to offer domestic-partner benefits to unmarried heterosexual and homosexual couples (See More Employers Offering Same-Sex Domestic Partner Insurance ), controversy around the country continues to pop up.

On the one side are proponents of extending benefits to domestic partners, among themUS Senator and Presidential hopeful Joe Lieberman (D-Connecticut) who promised to reintroduce a Senate bill granting the same benefits to domestic partners of federal workers as spouses currently receive. The legislation would give domestic partners life and health insurance, retirement pay, and compensation for on-the-job injuries. Domestic partners could be gay or straight, as long as they file an affidavit saying they are living together in a committed, intimate relationship, but are not married (See Lieberman Vows Federal Domestic Partner Benefits Bill ).

However, critics are quick to object to the notion, as was the case in Montana(See Montana Domestic Partner Benefit Bill Tabled ). There the naysayers said providing such benefits would escalate insurance rates, degrade the sanctity of marriage, and give special treatment to gays and lesbians. Cost issues were also brought when Minnesota defeated its version of the proposal (See Minnesota Governor to Sign Labor Bill Minus Domestic Partner Benefits ).

Compliance July 14, 2003

Appeals Court Affirms TWA Pension Plans' Termination

July 14, 2003 (PLANSPONSOR.com) - A federal appeals court has upheld a move by the federal pension insurer to terminate the pension plans of Trans World Airlines
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>In upholding a ruling by a federal judge in Washington, DC, the US DC Circuit Court of Appeals ruled that federal law allowed the Pension Benefit Guaranty Corp. (PBGC) to enter into an agreement leading to termination of the air carrier’s plans.

>The ruling came in a 2002 lawsuit by two TWA pilots and the Air Line Pilots Association, which alleged the PBGC could only terminate plans based on ERISA and not on a private agreement with financier Carl Icahn and the company. The appellate judges ruled that PBGC’s decision to terminate the TWA plans in 2001 was made on an ERISA-based determination in 1992. The pilots had complained that more than 1,000 pensioners were receiving lower pensions than what they had been promised – as much as $1,500 per month less.

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>The suit, which was filed in the US District Court for the District of Columbia, represents the latest chapter in the controversial 1992 acquisition of the airline (See  Former TWA Pilots Sue For Pension Shortfall).

>As part of that acquisition, Icahn entered into an agreement with the PBGC, the unions, and creditors of the airline, under which Icahn had to put $200 million into TWA and assume liability for its pension plans.  However, he gained the right to terminate the plans any time after 1995.  Ownership was transferred to TWA’s employees and creditors, and a bankruptcy court approved the final agreement in 1993 (TWA filed for bankruptcy protection in January 1992). The pension plans were frozen, preventing new benefits from being added to them.

>Then in late 2000, Icahn did terminate the plans, placing the Pilot’s Pension Plan (which, at the time, was underfunded by $200 million) and the Employees’ Pension Plan (which was underfunded by more than $500 million) in the hands of the PBGC (see  Pilot Pensions Grounded At TWA ). The current complaint alleges that the termination violated ERISA.

>The pilots claim they were tricked into a drastic reduction of wages and benefits in return for stock equity in the company and job security items including enhanced retirement benefits.  However, the Employee Stock Ownership Plan (ESOP) became worthless after Icahn was unable to turn the airline around and filed for bankruptcy. 

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