Problem: Does ERISA regulate mandated benefits such as Social Security benefits as well as voluntary benefits provided by employers?
Donovan v. Dillingham, 1982 U.S. Court of Appeals decision (precedent)
A "plan" under ERISA exists if a reasonable person can determine:
- The intended benefits
- A class of beneficiaries
- The sources of those benefits
- A procedure for determining benefits
Using the above Dillingham factors, would there be a plan in the following fact scenario? If so, would it be a welfare plan or a pension plan?
A supermarket created a voucher system whereby it provided grocery vouchers to retirees upon their retirement from the store and the retirees could use the vouchers in lieu of cash to purchase goods at the supermarket. The supermarket established the voucher program according to an "executive memorandum" but had no procedures for administering the voucher program nor a trust fund to fund the voucher program. The voucher program was simply funded out of the supermarket's general revenues and deducted as a business expense on the super market's tax return. Explain your answer.