Retirees file suit against Union Square over benefits

Wichita Falls Times Record News (TX)

April 19--Five retired Union Square Credit Union employees have filed a federal lawsuit against their former employer, alleging the institution violated the Employee Retirement Income Security Act of 1974 when in 2015 the credit union canceled certain lifetime employee benefits.

The original complaint was filed on March 10 in the U.S. District Court for the Northern District of Texas.

The credit union, in its response to the complaint, said the benefit plan was not protected by ERISA and was always subject to change, as per the employee handbook.

The plaintiffs in the case are Judy Hawthorne, John Christoff, Sue Moss, Charlotte Foster and Marsha Johnson. Hawthorne was with the credit union for 40 years and held positions as assistant vice president, corporate secretary and leasing manager; Christoff was with Union Square for 35 years and was executive vice president when he retired; Moss retired as assistant vice president in lending after 37 years; Foster, after 38 years with the credit union, retired as vice president of operations; and Johnson retired an assistant vice president and loan officer after 34 years at Union Square.

The suit alleges Union Square was in "blatant violation of its fiduciary duties under ERISA" when it canceled the retiree benefits in December 2015. The plaintiffs were notified in September that year of the change.

The retiree benefit, which was created in April 1988, stipulated that Union Square would pay an amount equal to 100 percent of the cost of an employee's health premium. An amendment to the plan in 2009 changed the benefit.

"... the Amendment completely eliminated all post-retirement benefits," the plaintiffs argued. "Although Defendant changed the Plan in 2009 to reserve Defendant the discretion to change the Plan, Defendant did not provide any notice to Plaintiffs who had all already retired in reliance on the benefits continuing for life."

The plaintiffs claim they were reassured before they retired by officials at Union Square that the benefits would be available for life. Hawthorne retired in 2006; Christoff in 2005; Moss in 2007; Foster in 2008; and Johnson in 2008.

The defendants in their April 5 filing in response to the suit said it admits that the plaintiffs had previously received certain benefits that were offered under the Union Square retiree benefit plan, but those benefits were always subject to change.

"Defendant admits only that it previously offered its retirees certain benefits which were always subject to Defendant's right to modify the benefits, that the benefits were described in the Defendant's handbook, and that many of the Plaintiffs participated in the adoption of the policy, changes to the policy and confirmation of Defendant's right to modify the benefits described in the policy," the response said.

The defendants later wrote, "Defendant admits only that pursuant to Defendant's policy providing for certain benefits to retirees, one of the benefits prior to Dec. 31, 2015, was a monthly amount of money equal to 100 percent of the cost for a single employee's health premium and that Defendant changed its policy, effective Dec. 31, 2015, to no longer provide certain retiree benefits that had previously been provided."

The plaintiffs are asking the federal court to recalculate the retirees' retirement benefits and immediately pay benefits that have been withheld from the time the plan was changed. They also ask for "monetary relief and such other relief" from loss of benefits, exemplary damages and prejudgment interest.

The defendant has also filed a motion to dismiss the case because the plaintiffs have not and cannot provide facts that would show the credit union offered an ERISA plan; the retiree benefit plan is not covered by ERISA because it did not have an ongoing administrative program; and the plaintiffs failed to present evidence of the credit union providing false representation.

Follow John Ingle on Twitter at @inglejohn1973.

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