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Here's one from the U.S. Court of Appeals for the Federal Circuit, involving ERISA (yikes!), which is the comprehensive federal regulatory framework for employer-provided pension plans, and takings.

In King v. United States, No. 23-1956 (Aug. 8, 2025), pensioners challenged Congress's 2014 reduction of benefits as a taking, alleging both physical and regulatory theories. As you might expect, there's a lot going on in this area, and there's enough ERISA goodness in this opinion to satisfy the most committed maven. Check out pages 3-8 for a pension primer. (And here you thought takings is a complex area.)

The short story is that in 2014 after it "became concerned about the fiscal health of many of the nation's multiemployer pension  plans," slip op. at 9, Congress amended ERISA to deal with the actual or threatened insolvency of multiemployer pension funds. What happens if a pension is obligated to pay, but would also "experience financial difficulties that resulted in an inability to pay the promised benefits[?]" Slip op. at 3. The future did not look bright.

The 2014 amendments allowed plan administrators that are deemed to be in danger to amend such plans to temporarily -- or even permanently -- suspend benefits. Congress deemed this necessary to "reallocat[e] the shortfall burden across all plan beneficiaries (with some narrow exceptions, e.g., those over 80 or disabled), while continuing to protect pension benefits to the maximum extent possible." Slip op. at 10. These reductions in benefits cannot be focused on any one group, but must be "equitably distributed," with a maximum reduction allowed. No reductions are effective until a vote by plan participants. 

When Teamsters union plan administrators determined that their plan was in danger of becoming insolvent in less than 14 years, these provisions were invoked and after meeting the standards noted above, a reduction in plan benefits was put into place. Class action lawsuit followed in the Court of Federal Claims, asserting the reduction was a taking of private property. The CFC granted the federal government summary judgment. 

The Federal Circuit affirmed. 

The Federal Circuit first noted that pension benefits are not truly "property," but "more in the nature of a contract." Slip op. at 3. That said, "contracts and the rights they secure" may be property. Slip op. at 16. However, while it may be true that a vested pensioner has a contractual right to receive a certain level of benefits from an employer, it does not follow that the person also has an equitable or property interest in the plan itself such that the government is liable for a taking for any reduction. Id. ("The fact that employees’ rights under a plan are vested simply means that they became vested contract rights, which have been earned by working for a specified number of years, and which the employer cannot eliminate."). 

The bottom line here:  

We assume, without deciding, that the plaintiffs have identified a cognizable contract right under the Plan documents, which constitutes property for purposes of a takings analysis, see A & D, 748 F.3d at 1152, though they do not hold a property interest in the assets of the Plan itself. The Claims Court concluded that the plaintiffs “identified a cognizable property interest in receiving their unreduced and vested pension benefits at a level contractually promised by the Teamsters Fund plan agreement.” King II, 165 Fed. Cl. at 626. While the government disagrees with this holding, it “has not appealed the finding of a cognizable interest.” Appellee’s Br. 17; see also id. at 20–30. In light of our conclusion that there was no taking here, we assume that the Claims Court correctly articulated plaintiffs’ protected property interest.

Slip op. at 16-17.

The court next concluded that this did not result in a physical taking because this is not a physical or intangible personal property, but a contract right. Congress here merely readjusted the rights and obligations under third-party contracts. That's right folks, we're talking that infamous case, Omnia Commercial Co. v. United States, 261 U.S. 502 (1923) which held no taking when the feds "requisitioned" the steel that was allocated by contract to Omnia, and directed the supplier to send all the steel to the government. The Court held that the contract was not taken, but rather merely "ended."

In short, destruction of contract rights by a valid exercise of government power is just one of those commercial risks that the contracting parties have to absorb. The Federal Circuit was not persuaded by cases such as Cedar Point, which the court held "all involved the government's appropriation of specific physical or intangible property for its own use or the use of others, not the modification of contractual obligations owed by third parties." Slip op. at 23 

On the regulatory taking (Penn Central) theory, the Federal Circuit held that the economic loss 29% for five years here was not "severe," that the pensioners should not have relied on a statutory government program that is subject to frequent alteration, and that the character of the government action here is one of "substantial public purpose." Slip op.at 32. The point here was to avoid insolvency.  

King v. United States, No. 23-1956 (Fed. Cir. Aug. 8, 2025)

 

            

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