Allied Structural Steel Company v. Spannaus

Appellant, an Illinois corporation with an office in Minnesota, maintained a pension plan that entitled employees who were at least 65 years old at retirement to receive benefits as long as the company was still in business and the plan was still in effect. In 1974, Minnesota enacted the Private Pension Benefits Protection Act, which required certain employers in Minnesota to pay a pension funding charge if they terminated a pension plan or closed a Minnesota office and at the time of termination or closure, existing pension funds were not sufficient to pay pensions to employees who had worked at least 10 years. When appellant closed its Minnesota office, at least nine of the newly discharged employees did not have vested pension rights under the company’s plan but qualified for pension benefits under the Act because they had been employed by the company for more than 10 years. The State assessed appellant a pension funding charge of approximately $185,000 and appellant challenged the constitutionality of the Act under the Contract Clause.