Lix

Plaintiffs, retired employees of Meletron Corporation (Meletron), and its successor, the Meletron Division of DeLaval Turbine, Inc. (DeLaval), the latter a subsidiary of Transamerica Corporation, brought this action for declaratory relief against defendants, the trustees of the International Association of Machinists Labor-Management Pension Fund (pension fund), for wrongful termination of plaintiffs’ pension benefits. The trial court upheld the termination of benefits, and plaintiffs appeal, asserting that the trustees acted arbitrarily, capriciously, and unreasonably, in violation of their fiduciary duty to plaintiffs.

Facts

The pension fund, created pursuant to section 302(c) of the Labor Management Relations Act ( 29 U.S.C. § 186 (c)(5)), began to receive contributions from Meletron on 1 July 1967 to provide retirement benefits for employee members of the International Association of Machinists Union (the Union) and for certain nonunion employees. Meletron was obligated to contribute 10 cents to the pension fund for each hour worked by covered employees, and if Meletron continued pension contributions for 48 months, employees who met all vesting requirements would…