ERISA's Section 510 Not Violated If Fully Vested

October 18, 2002 (PLANSPONSOR.COM) - The U.S. District Court for the District of New Jersey ruled that an employer is not in violation of ERISA Section 510 if the pension in question is fully vested upon termination of the employee.

In the case –Devoy v. Tricomm Services Inc., D. N.J., No. 02-375 (JBS) – Justice Jerome Simandle issued asummary judgment stating Tricomm Services did not interfere with the rights to receive pension benefits, as claimed by plaintiff Michael Devoy in his challenge. Devoy claimed a violation of ERISA Section 510, according to a report from Washington-based legal publisher BNA.

Michael Devoy was laid off by Tricomm in January 2000, where he had been employed as a telecommunications installer.   During his employment, Devoy contributed to Tricomm’s 401(k) plan, which functions as Tricomm’s pension plan.

Upon his termination, Devoy filed a grievance with the International Brotherhood of Electrical Workers, Local 380, of which he was a member.

In his judgment, Justice Simandle said that since Devoy had already vested in his 401(k), he could not establish a Section 510 claim.   For a violation of Section 510 to occur an employer must engage in conduct which prohibits the attainment of any right to which an employee may be entitled.  

Under the guidelines of Tricomm’s 401 (k) plan, after six years of employment an employee is considered vested, a level Devoy had obtained at the time of his termination.   Another claim by Devoy regarding the termination was considered irrelevant since he was already vested in the plan.