Can They Do That? / Workplace Advice

CAN THEY DO THAT? / WORKPLACE ADVICE

September 07, 2005|By CARRIE MASON-DRAFFEN

Company likely can dock worker for old pension

Q: I was working my way toward qualifying for a union pension of $775 per month, plus health coverage. But in 1984, based on a National Labor Relations Board ruling, my employer withdrew recognition of the union, calling it "an inappropriate bargaining unit," and refused to bargain with it anymore.

This left my union pension frozen at 16 years with a vested benefit of only $295 per month at age 65 and minus the health coverage.

After declaring the union invalid, the company put me into its pension plan, from which I hoped to collect $775, the amount I would have gotten from my union pension. And because my company refused to recognize my union, I also had to work five extra years to get credit for my years of service.

I am now collecting a pension, and the switch in pension plans has one big ironic detail: The company pension formula subtracts the $295 I get from the union.

I believe the "prior union service" provision that offsets funds from other sources was intended to cover employees who voluntarily moved from the union into management, not those who had their union status declared null and void.

Can the company subtract this money when 20 years ago it proved to the federal government that the union wasn't legal and walked away from it?

A: Your company's action is probably legal, said Victoria Quesada, a pension-rights attorney at Quesada & Moore LLP in West Hempstead, N.Y. "Essentially, if the company is giving the employee credit for all years of service with the union and the company," she said, "it is perfectly legal for them to offset the benefit he is receiving from the union."

But, she warned, "He may wish to have an actuary check the calculations and an attorney check the plan language to see if what he is receiving is consistent with the plan design."

Carrie Mason-Draffen is a columnist for Newsday, a Tribune Publishing newspaper. E-mail her at yourmoney@tribune.com.

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