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add a COLA to all retirement benefits. In 1987, the plan was
terminated without provision for the funding of future COLAs.
Ms. Hickey and other plan participants brought an action to
preserve the COLA. They contended that the COLA was part of
their monthly accrued retirement benefit and could not be
eliminated without violating 29 U.S.C. sec. 1054(g), the
equivalent provision to section 411(d)(6). The Court of Appeals
for the Seventh Circuit agreed with Ms. Hickey, finding that the
COLA benefit could not be reduced by amendment. The Court of
Appeals observed that
A participant’s right to have his basic benefit
adjusted for changes in the cost-of-living accrued each
year along with the right to the basic benefit. A
participant’s entitlement to his or her normal
retirement benefit included, as one component, the
right to have the benefits adjusted pursuant to the
COLA provision. [Id. at 469.]
Similarly, in Shaw v. Intl. Association of Machinists &
Aerospace Workers Pension Plan, 750 F.2d 1458 (9th Cir. 1985),
the plan included a “living pension” feature. The living pension
was analogous to a COLA benefit, because it provided for
adjustment of the benefit after retirement by substituting in the
benefit formula the current monthly salary of the retiree’s old
job in place of the retiree’s final monthly salary. The plan in
Shaw was amended in 1976 to decrease the living pension feature
and suit was brought by a participant who had retired in 1975.
Id. at 1460. The court in Shaw emphasized that the entire
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