JUSTICES SIDE WITH LOCKHEED : EARLY RETIREMENT CONDITIONS LEGAL.

Byline: Laurie Asseo Associated Press 

Companies may offer early retirement incentives that require employees to give up job-related claims against the firm, the Supreme Court said Monday.

Ruling unanimously in a case involving the Lockheed Corp., the court said imposing such conditions does not violate employers' financial duty under a federal pension law.

``The question here is whether (the federal law) prevents an employer from conditioning the receipt of early retirement benefits upon the participants' waiver of employment claims,'' Justice Clarence Thomas wrote for the court. ``We hold that it does not.''

The justices also ruled that a 1986 law requiring companies to provide pension coverage to older new employees does not apply retroactively. That means such employees need not be given credit for the years they had been excluded from pension coverage.

A lower court had ruled that Lockheed could not require workers taking early requirement to give up the right to bring job-related claims against the company. That court also said older employees provided pension benefits under the 1986 law must receive credit for their earlier years of work.

The case involved Paul L. Spink of Los Angeles, who was hired to work at Lockheed's Burbank plant in 1979 when he was 61. Because he was over 60, he was not eligible to participate in the company's pension plan - an age limit that was lawful at the time.

A 1986 amendment to the Employment Retirement Income Security Act prohibited pension plans from excluding older new employees. Spink was added to the Lockheed pension plan, but he was not given credit for his previous working years.

In 1990, Lockheed decided to reduce its work force by offering early retirement incentives. To participate, employees had to give up the right to bring a variety of job-related claims against the company.

Spink retired in 1990 but decided not to take the early retirement benefits because he did not want to give up any claim against Lockheed.

He sued Lockheed in 1992. A federal judge dismissed the case, but the 9th U.S. Circuit Court of Appeals reversed. The 1986 amendment should be considered retroactive and Spink must be given credit for his previous work years, the court said.

In addition, it said Lockheed could not require employees to give up job-related claims in exchange for early retirement benefits. That would be using pension assets ``to purchase a significant benefit for Lockheed'' in violation of ERISA, the court said.

Monday, the Supreme Court reversed the lower court. Companies that amend their pension plans are not acting as fiduciaries as defined by ERISA, Thomas wrote.