MEMORANDUM AND ORDER
Huyett, District Judge.
The issues raised by the facts in this case focus sharply on one of the most recurring problems facing labor management relations in the United States today -- the loss of pension benefits by hundreds of thousands of American workers after many years of reliance and expectations of security after retirement. Instances of lost pension benefits caused by plant closings, business cessations, lay-offs and other factors beyond the control of the employee are of disturbing proportions. Hardships caused individual employees and the dislocations caused society by loss of pension benefits are severe and are a cause for concern by responsible persons. Methods of avoiding these hardships and dislocations have been the subject of inquiry by Congress during the past three years, and a Bill providing means towards solving and seeking to avoid the problems caused by loss of pension benefits has only recently been introduced in the Ninety-Third Congress. (S4)
In addition, commentators have criticized the courts for being unnecessarily restrictive and unrealistic in the interpretation given pension fund agreements with the result that many employees are left financially insecure in their later years of life. See M. Bernstein, Employee Pension Rights When Plants Shut Down: Problems and Some Proposals, 76 Harv. L. Rev. 952 (1963). And they have exhorted the courts to be more imaginative in dealing with problems raised by lost pension benefits. See N. Levin, Proposals to Eliminate Inequitable Loss of Pension Benefits, 15 Vill. L. Rev. 527 (1970); Note, 70 Col. L. Rev. 909 (1970). One proposal has been that federal courts establish a federal common law pertaining to union-management negotiated pension fund agreements premised jurisdictionally on § 301 of the Labor Management Relations Act, as amended, 29 U.S.C. § 185 (1970) similar to the federal common law over collective bargaining agreements which evolved as a result of the Supreme Court's decision in Textile Workers v. Lincoln Mills, 353 U.S. 448, 77 S. Ct. 912, 1 L. Ed. 2d 972 (1957). See P. Thompson, Mergers, Dissolutions and Transfers, 9 Textbook For Welfare, Pension Trustees and Administrators 440, 443 (1967). This proposal would free federal courts to a far greater degree than is possible at this time from restrictive state court decisions which rely solely on contract principles in interpreting pension fund agreements. See, e.g. Schneider v. McKesson & Robbins, Inc., 254 F.2d 827 (2 Cir. 1958); Knoll v. Phoenix Steel Corp., 325 F. Supp. 666, 669 (E.D. Pa. 1971), aff'd. 465 F.2d 1128 (3 Cir., filed August 25, 1972), cert. denied 409 U.S. 1126, 93 S. Ct. 941, 35 L. Ed. 2d 257 (1973); George v. Haber, 343 Mich. 218, 72 N.W. 2d 121 (1955); Gorr v. Consolidated Foods Corp., 253 Minn. 375, 91 N.W. 2d 772 (1958); Green v. Copco Steel and Engineering Co., 22 Mich. App. 16, 176 N.W. 2d 690 (1970).
Without guidance by the Supreme Court we do not have authority to establish such a federal common law for union-management negotiated pension fund agreements. We are not required, however, to ignore the consequences of pension fund disruptions on federal interests in labor-management relations. As the Supreme Court noted in Lewis v. Benedict Coal Corp., 361 U.S. 459, 468, 80 S. Ct. 489, 495, 4 L. Ed. 2d 442 (1960): "It is a commonplace of modern industrial relations for employers to provide security for employees and their families to enable them to meet problems arising from unemployment, illness, old age or death." And, although pension benefits for already retired employees is not a mandatory subject of collective bargaining as "terms and conditions of employment" within the meaning of §§ 8(a)(5) and 8(d) of the National Labor Relations Act, Allied Chemical and Alkali Workers of America, Local Union No. 1 v. Pittsburgh Plate Glass Co., Chemical Division, 404 U.S. 157, 92 S. Ct. 383, 30 L. Ed. 2d 341 (1971), pension benefits for active employees is a mandatory subject of collective bargaining. Id. 404 U.S. at 159, 92 S. Ct. 383. In the case before us we are not only concerned with the rights of employees who are retired, but also with the apprehensions of active employees in respect to retirement benefits. It is in this light then that we proceed to the facts and issues in the case before us.
Plaintiffs, the Union Members of the Pension Committee of the Philadelphia Bakery Employers and Food Driver Salesmen, Dairy and Ice Cream Workers Union, Local No. 463 and Teamsters' Union Local No. 676 Pension Plan, seek a permanent injunction restraining defendant Jules Junker, Secretary of the Pension Committee, from refusing to approve pension applications and payments pursuant to already approved pension applications for former employees of Louis Burke, Inc. and Wm. Freihofer Baking Company. Plaintiffs contend that the defendant's action violates the terms of the Pension Fund Agreement, and constitutes a breach of defendant's fiduciary duties as a member of the Pension Committee. Plaintiffs assert jurisdiction under § 301(a) of the Labor Management Relations Act as amended 29 U.S.C. § 185(a) (1970) (Act).
Defendants, Employer Committee Members of the Pension Fund Agreement, in an amended answer counterclaim seeking a permanent injunction ordering plaintiffs to join with the defendants in instructing the Administrator of the Pension Fund (Fund) to make no further payments to former employees of employers who have ceased making contributions to the Fund the value of whose past contributions to the Fund have been "exhausted". Defendants contend that making these payments would be: (1) in violation of § 302 of the Labor Management Relations Act, as amended 29 U.S.C. § 186 (1970),
(2) contrary to the provisions of the Pension Fund Agreement
and (3) an improper, unlawful and unfair diversion and dissipation of funds held for the benefit of former employees and employees of employers making contributions to the Fund.
Before a hearing could be held on the requests by the parties for injunctions, the plaintiffs filed a motion for the appointment of an impartial umpire to decide the following issue upon which the Committee Members deadlocked at a meeting held on October 25, 1972:
"MOTION was made and seconded that the Pension Committee Members be instructed that all litigation concerning Section 11 of the Plan, more particularly, the suit presently before the Federal District Court for the Eastern District of Pennsylvania, be stayed for a minimum period of six months to permit a change in investment counselling and to review the Fund financing during the specified period.
During the specified period, all Pension payments due will be paid.