Court holds ERISA plan can amend to redefine disability and take away disabled man's benefits
In Price v. Bd. of Trustees of the Ind. Laborer's Pension Fund, et al., a majority of the three judge Sixth Circuit panel assigned to the case ruled that the Pension Fund was within its legal rights when it stopped paying disability payments to a disabled man. Price was determined to be disabled under the plan in 1990. Under the Plan as it was written, he was entitled to continue to receive benefits until the age of retirement, so long as he remained disabled. In 2006, the Plan redefined "disability" in a way that rendered Price no longer eligible for benefits. It appears that the change in definition basically related to whether a disabled person was disabled from every possible job, or only some jobs.
The Plan applied the new definition to Price in 2007 and stopped paying him benefits. He argued that his right to disability pay was vested in 1990 under the rules of the Plan as they existed at that time. He maintained that just as "death" benefits vest and are never revoked, his right to disability pay vested when he was found to be disabled. While the dissenting Judge agreed with this analysis, the two-judge majority disagreed and cited newer rulings allowing an ERISA plan to re-define benefits and apply new definitions to revoke benefit entitlements.