Cite as: 520 U. S. 510 (1997)
Opinion of the Court
ence clause applies only to "vested" rights. Had Congress intended to confine § 510's protection to "vested" rights, it could have easily substituted the term "pension plan," see 29 U. S. C. § 1002(2), for "plan," or the term "nonforfeitable" right, see § 1002(19), for "any right." But § 510 draws no distinction between those rights that "vest" under ERISA and those that do not.
The right that an employer or plan sponsor may enjoy in some circumstances to unilaterally amend or eliminate its welfare benefit plan does not, as the Court of Appeals apparently thought, justify a departure from § 510's plain language. It is true that ERISA itself "does not regulate the substantive content of welfare-benefit plans." Metropolitan Life Ins. Co. v. Massachusetts, 471 U. S. 724, 732 (1985). Thus, unless an employer contractually cedes its freedom, see, e. g., Adcox v. Teledyne, Inc., 21 F. 3d 1381, 1389 (CA6), cert. denied, 513 U. S. 871 (1994), it is "generally free under ERISA, for any reason at any time, to adopt, modify, or terminate [its] welfare pla[n]." Curtiss-Wright Corp. v. Schoonejongen, 514 U. S. 73, 78 (1995).
The flexibility an employer enjoys to amend or eliminate its welfare plan is not an accident; Congress recognized that "requir[ing] the vesting of these ancillary benefits would seriously complicate the administration and increase the cost of plans." S. Rep. No. 93-383, p. 51 (1973). Giving employers this flexibility also encourages them to offer more generous benefits at the outset, since they are free to reduce benefits should economic conditions sour. If employers were locked into the plans they initially offered, "they would err initially on the side of omission." Heath v. Varity Corp., 71 F. 3d 256, 258 (CA7 1995). Section 510 counterbalances this flexibility by ensuring that employers do not "circumvent the provision of promised benefits." Ingersoll-Rand Co., supra, at 143 (citing S. Rep. No. 93-127, pp. 35-36 (1973); H. R. Rep. No. 93-533, p. 17 (1973)). In short, "§ 510 helps to make promises credible." Heath, supra, at 258. An employer
515
Page: Index Previous 1 2 3 4 5 6 7 8 NextLast modified: October 4, 2007