Before: Stapleton, Alito and Rosenn, Circuit Judges
The opinion of the court was delivered by: Stapleton, Circuit Judge
On Appeal From the United States District Court For the Eastern District of Pennsylvania (D.C. Civil Action No. 96-cv-00814)
Plaintiffs Transport Workers Union of America, Local 290 ("Transport Workers"), Leonard F. Browna, and William Haggerty instituted this action against Southeastern Pennsylvania Transportation Authority ("SEPTA") and SEPTA's Retirement Plan for Supervisory, Administrative and Management Employees ("SAM Plan"). Plaintiffs claim that defendants violated the Contract Clauses of the United States and Pennsylvania Constitutions by modifying the SAM Plan in August 1995 to require, as a condition of participation, a contribution of employee earnings to the Plan. On cross-motions for summary judgment, the district court granted defendants' motion and denied plaintiffs' motion. This appeal followed. We will affirm.
SEPTA was created pursuant to the Metropolitan Transportation Authorities Act of August 14, 1963 ("MTA Act") and is the sponsor of the SAM Plan, which was established by SEPTA in 1965 and covers approximately 2,300 supervisory and management-level employees. SEPTA was authorized to establish the SAM Plan by the MTA Act, which provides that:
There shall be established and maintained by the authority a pension and retirement system to provide for payments when due under such system or as modified from time to time by resolution of the [authority's] board. For this purpose, both the board and the participating employees shall make such periodic payments to the established system as may be determined by resolution.
74 Pa. Cons. Stat. Ann. § 1724(c).
Prior to the events giving rise to this litigation, the SAM Plan provided that SEPTA would "contribute . . . such amounts . . . as are required, in accordance with the funding policy established by the Board under the terms and conditions of [the] Plan, to fund the Benefits provided under [the] Plan." App. at A77. The Plan further provided that the "Board shall have the power, at any time and from time to time, . . . to modify, alter or amend the Plan and/or Master Trust in any manner which it deems desirable provided that no amendment . . . may affect the rights, duties or responsibilities of the Trustee without its prior written consent." App. at A116. Prior to October 8, 1995, no employee contribution had been required of employees covered by the SAM Plan.
Effective in December 1995, the SAM Plan was amended by the Board to require that employees covered by the Plan would contribute to it in the future .9% of their earnings up to the Social Security covered compensation level and 1.1% of their earnings above that level. The benefits provided by the Plan were not altered in connection with this amendment. The right to benefits vested as of December 1995 was not affected but payment of the contribution in the future was a condition of accruing any additional benefits under the Plan. Simultaneously, the Board approved, effective October 1995, a three percent wage increase for the individual plaintiffs and others similarly situated.
Plaintiffs' suit seeks declarative and injunctive relief from the employee contribution requirement. Their complaint asserts that the Board's amendment of the Plan, and the MTA Act under which it was authorized, both violate the Contract ...