Transferred Employees Not Entitled to Pension Benefits under Successor Employer's Plan: Third Circuit | Practical Law
On February 29, 2012, the US Court of Appeals for the Third Circuit held that employees who were transferred to a new employer (Siemens) from a prior employer (Westinghouse) pursuant to an asset purchase agreement (APA) were not entitled to receive pension benefits from Siemens. The court held that Siemens did not establish a "plan" under the Employee Retirement Income Security Act of 1974 (ERISA) for the transferred employees during the 13-day period after they became employed by Siemens because Westinghouse continued to maintain the plan. The court also held that Siemens was not required to provide permanent job separation (PJS) benefits to transferred employees under the APA because Westinghouse's pension plan provided that employees would be ineligible for benefits if employees were offered continued employment by a successor employer.