Written by attorneys · grounded in primary & secondary sources — see below
A plan, fund, or program established or maintained by an employer or an employee organization that provides retirement income to employees or results in a deferral of income by employees extending to the termination of employment or beyond.
Sources & Authorities· 11 primary sources
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Cases
Uniform Acts
Model Codes
Restatements
Dictionaries
How it applies
Common Examples
6
Firm Retirement Plan for Nonlawyer Staff
Ash Resource, an environmental law partnership, created a retirement plan covering its nonlawyer employees, including environmental scientist Jackson and GIS technician Leandro. The plan provides annual payments to Jackson and Leandro calculated as a percentage of the firm's overall long-term profitability across all matters. Payments are framed as standard retirement benefits available to all qualifying staff after five years of service, with no direct allocation from individual client fees.
Corporate Pension and Bonus Plan for Retiree
MotorGrid, an automotive parts manufacturer, adopted a written plan granting Luis, a retired plant manager, a lifetime monthly pension and annual share bonuses. After retiring, Luis began working for MotorGrid as an independent sales representative under a separate commission agreement. Several years later, a newly elected board reviewed the prior plan, declared it ultra vires, and voted to rescind Luis's pension and share bonuses.
Pension Plan as Corporate Shareholder
AFSCME Employees Pension Plan held shares in CA, Inc. and sought to place a shareholder proposal on the corporate ballot regarding board procedures. The corporation resisted the proposal, claiming it exceeded the scope of permissible shareholder action under Delaware law. The pension plan pursued litigation to compel inclusion of the proposal.
CA, Inc. v. AFSCME Employees Pension Plan953 A.2d 227 (Del. 2008)
Divorce and ERISA Pension Beneficiary
David Egelhoff designated his wife Donna as beneficiary of his ERISA-governed life insurance policy and pension plan. After the couple divorced, David died in an accident without changing the designations. Donna claimed the proceeds while David's children from a prior marriage asserted rights under state revocation-on-divorce law.
Egelhoff v. Egelhoff532 U.S. 141 (2001)
Pension Plan Holdings in Corporate Political Speech
Individual investors held stock in corporations through pension plans and mutual funds. The corporations used general treasury funds to finance political advertisements. Investors sought to monitor or alter the holdings but faced practical barriers because most trades occurred through intermediaries.
Citizens United v. Federal Election Commission558 U.S. 310, 352 (2010)
Congressional Oversight of Pension Amendments
Congress enacted the Multiemployer Pension Plan Amendments Act requiring proposed premium increases by the Pension Benefit Guaranty Corporation to receive approval by concurrent resolution. The statute created a mechanism for legislative review of agency action on pension funding schedules.
Immigration & Naturalization Service v. Jagdish Rai Chadha462 U.S. 919, 954 n. 16, 103 S.Ct. 2764, 2785 n. 16, 77 L.Ed.2d 317
Common questions
Frequently Asked
4
When is a retirement plan for nonlawyer employees permissible under professional conduct rules?+
A lawyer or law firm may include nonlawyer employees in a compensation or retirement plan even though the plan is based in whole or in part on a profit-sharing arrangement. The plan must function as deferred compensation tied to overall firm performance rather than direct allocations from specific client fees. Vesting requirements and uniform availability to qualifying staff support permissibility by demonstrating a retention purpose.
Supporting sources
Does a corporation have authority to grant pensions and share bonuses to former employees and agents?
Modern corporation statutes expressly authorize a corporation to pay pensions and establish pension plans, profit sharing plans, share bonus plans, and similar benefit or incentive programs for any or all of its current or former directors, officers, employees, and agents. The authority reaches retirees and independent contractors serving as agents. A later board declaration that the plan is ultra vires does not negate the statutory power that existed at adoption.
Supporting sources
How does ERISA interact with state laws that revoke spousal beneficiary designations upon divorce?+
ERISA preempts state statutes that automatically revoke a spouse's beneficiary designation on divorce when the designation applies to an ERISA-governed pension plan or life insurance policy. The federal statute controls the administration of the plan, so the listed beneficiary remains entitled to the proceeds even after divorce.
Supporting sources
What features distinguish a permissible profit-sharing retirement plan from prohibited fee sharing with nonlawyers?+
A permissible plan calculates benefits from aggregate firm profitability, imposes a multi-year vesting period, and applies uniformly to all qualifying nonlawyer staff. Features that indicate impermissible fee sharing include direct ties to fees from specific clients, indefinite post-retirement payments without actuarial grounding, and mirroring of prior employment profit shares without adjustment for overall firm results.
Supporting sources
Pension Plan
Amendments Act of 1980, Pub. L. No. 96-364, § 102, 94 Stat. 1208, 1213, 29 U. S. C. 1322a [(1976 ed., Supp. V)] (Schedules proposed by
Pension
Benefit Guaranty Corporation (PBGC) which…
, see Evans, A Requiem for the Retail Investor? 95 Va. L. Rev. 1105 (2009), which makes it more difficult both to monitor and to alter particular holdings. Studies show that a majority of…
were governed by ERISA, and Mr. Egelhoff designated his wife as the beneficiary under both. In April 1994, the Egelhoffs divorced. Just over two months later, Mr. Egelhoff died…
retirement plan
." Id. , at 716, n. 30. We further noted that although Title VII does not contain a "cost-justification defense comparable to the affirmative defense available in a price discrimination…
Professional ResponsibilityRegulation of the legal profession · Fee division with a nonlawyerMPREFoundational