	Background

Under the Employee Retirement Income Security Act of 1974 (ERISA), a single-employer defined benefit pension plan may be terminated at the employer's discretion. However, the implementation of the decision to terminate a plan is a decision that implicates a fiduciary responsibility to the plan participants and beneficiaries. There are two basic issues in Beck regarding whether the defendant employer breached ERISA's fiduciary duty requirements. No section in ERISA explicitly provides that a standard termination may occur by merging the terminating plan with a multiemployer plan. They alleged that Crown had violated its fiduciary duty under ERISA by failing to adequately consider the merger proposal. Instead, the Supreme Court found that Crown did not breach its fiduciary duty in failing to consider PACE's merger proposal, because merger is not a permissible form of plan termination under ERISA.
The Beck v. PACE International Union case concerned the decision by an employer in bankruptcy proceedings to terminate its pension plans. The employer, which was both plan sponsor and administrator, had the option of terminating the plans by buying annuities for plan participants and beneficiaries or by merging the plans with a multiemployer plan. It chose the annuity option. At issue in Beck was whether the employer breached the fiduciary duty owed under the Employee Retirement Income Security Act (ERISA) to plan participants and beneficiaries by failing to adequately consider the merger proposal. The Supreme Court found that the employer did not breach its fiduciary duty in failing to consider PACE's merger proposal, because merger is not a permissible form of plan termination under ERISA. This report discusses the Beck case and will be updated as events warrant.