The Court of Appeals for the Third Circuit recently ruled that an owner-employer could not recover contributions made to a multi-employer pension fund on his behalf. The contributions were made during a period when the owner-employer knew that he did not qualify to participate in the plan, and when he retired, he applied for a pension based on the contributions. The fund subsequently denied his application on the grounds that he was not a participant when the contributions were made. He and the company then sued for a refund of the contributions, arguing that it was inequitable for the fund to keep the contributions without paying him a pension. The owner-employer and company obtained a favorable ruling on general equity grounds at the district court level, but the Third Circuit reversed the decision. According to the Third Circuit, ERISA places “strict limits” on circumstances permitting refunds of employer contributions from multi-employer plans “in order to further ERISA’s primary purpose of protecting and stabilizing the assets of employee pension plans, thereby safeguarding the interests of plan participants and their beneficiaries.” Thus, as the Third Circuit explained in detail, refunds from multi-employer plans are permitted by ERISA only when contributions are made mistakenly, and only if the employer submits a refund claim to the plan within six months of the plan administrator’s determination that the contributions were made in error. Here, the facts of the case established that the contributions were deliberately made with the knowledge that the owner-employer did not qualify as a participant, and the company did not seek a refund within the applicable six-month period after receiving notification from the fund that the contributions were made in error. As a result, the Third Circuit determined that the fund was not permitted to refund the contributions under ERISA and concluded that an order of restitution under the circumstances would not serve ERISA’s purposes. This case demonstrates the importance of ensuring that plan contributions are made only for eligible participants and ensuring that refund claims are made promptly in the event of a legitimate mistake. (Mazza v. Sheet metal Workers’ National Pension Fund, 3rd Cir. 2010)