DISPOSITION: |
|
Plaintiffs' motions for summary judgment granted. Plaintiffs' appeal of magistrate's order denied
as moot with leave to reinstate. Defendants' motion to dismiss for lack of standing and motions for summary judgment denied.
|
PROCEDURAL POSTURE: |
|
Plaintiffs, class of employees, challenged defendant employer's pension plan as violative
of the age discrimination prohibitions of the Employee Retirement Income Security Act (ERISA), 29 U.S.C.S. § § 1001-1461.
Both parties moved for summary judgment and the employer moved to dismiss. |
OVERVIEW: |
|
The class claimed that the employer's pension credit formula (PCF) violated ERISA because it was age discriminatory.
This claim was based on the PCF's benefit conversion factor which increased in direct correlation to an employee's age.
The class alleged that the cash balance formula also violated ERISA's laws against age discrimination. This claim was based on how
interest credits accrued on a participant's personal pension account balance until he reached normal retirement age. The benefit
conversion factor contained in the PCF reduced a participant's accrued benefit solely on increases in age or service. Accordingly,
the 1995 PCF violated ERISA. The employer's argument that no specific employee actually suffered a reduction in his or her
accrued benefit was rejected because it related to damages as opposed to liability and because Congress conferred statutory standing to all
"participants" in an ERISA plan. Under the PCF, a participants's rate of benefit accrual decreases because of the attainment of a certain age.
For this reason, the PCF violated ERISA. |
OUTCOME: |
The employees' motion for summary judgment was granted in part and denied in part. The employer's motion to dismiss was denied
and the employer's motion for summary judgment was granted in part and denied in part.