Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
Legally, pensions do not have to be offered by an employer. When a pension is offered, it is governed under the Employee's Retirement Income Security Act. Under ERISA
, the terms of the plan govern. Until an employee actually retires under the plan, that plan can change in accordance with the employer's agreement with their contract with the pension plan.
When an employer takes over another employer who has a pension plan, the employer can terminate or freeze the pension plan, which is what you are describing above.
Those who are "Vested" in the plan can remain in the plan and collect their retirement benefits when they are eligible to retire according to the plan or the employer can offer them a buyout of the plan. The plan is frozen for the vested employees unless the employer allows them to add more to it. On a frozen plan, when the vested employee actually retires from the employer, they are entitled to collect if they meet the qualifications.
In general, you cannot just collect your pension and continue working for the same employer, you have to actually retire to be able to collect your amount which is based on your contributions up to the time that the plan was frozen. So it is legal under ERISA and MA law to tell an employee they cannot collect their pension benefit until they retire from the company.