Re: DB Plan T'ees' authority to fund benefit that only retirees will g

[Guest songlaw]

In an earlier question, I asked if the trustees of a governmental plan (specifically, the DB plan of the municipality's Police Officers and Firefighters) can use part of the plan's overfunded surplus to make a COLA increase to the retirees' health insurance coverage without also having to give the same stipend to the current participants. Thanks to your responses and research, I know that they can do this. Now I need to know whether:

(a) the Trustees would have an obligation to listen (and, perhaps, to bow) to current participants if they were to object to such an allocation; and

(B) whether the Trustees could turn a deaf ear to such potential objections even if the allocation to increase the retirees' medical coverage were to be taken, not from the overfunded surplus, but from the City's (plan-sponsor's) current and future (annual) contributions?

I have reasoned that the Trustees could authorize such a "reasonable" allocation (i.e. one that was not clearly unreasonable), even if not taken from the surplus, because they, as fiduciaries, have the authority to decide which allocations, when made to which recipients, are justifiable. Not every participant must benefit from his participation in exactly the same way. Certain retiree benefits, if reasonable and deemed worthwhile by the Trustees (as fiduciaries), may need to be funded whether or not the current participants ever receive or share in those or similar benefits.

Do you agree with me?

Am I correct or mistaken?