The U.S. Supreme Court issued what was labeled a "fundamentally unfair" ruling in its decision that companies don't have to share surplus pension funds with workers, even if workers contributed to them.

The case involved a defined benefit pension plan at Hughes Aircraft Co. Both the company and workers made mandatory contributions to the plan. When the pension plan reached a $1 billion surplus, management stopped their contributions and used the surplus to finance a new plan benefitting new employees who did not have to contribute to the plan.

Retired Hughes workers sued the company, charging that the changes effectively terminated the plan and they were entitled to a share of the surplus under provisions of the Employee Retirement Income Security Act (ERISA).

Writing for the unanimous court, Justice Clarence Thomas said the retirees' case rested on the "erroneous assumption that they had an interest in the plan's surplus." He said their contributions were exchanged for defined benefits so they have no rights to profits their money earned.

Pension Rights Center Executive Director Karen Ferguson said the Supreme Court's reversal of a lower court ruling decision endorsed "one more corporate sleight of hand to siphon off pension plan surplus for corporate purposes instead of requiring that it be used for the employees, who by law are supposed to be the sole and exclusive beneficiaries. The decision is fundamentally unfair."

The ruling is expected to influence other similar lawsuits pending against General Electric and Georgia Pacific.

Also affected by the decision, according to pension experts, will be an estimated $60 billion of about $2 trillion in defined benefit plans that are similar to the Hughes plan.

– From a Press Associates Inc. article