Comments on: Compelling Decision From Court in CIGNA Cash Balance Class Action Case http://qualifiedpensionconsulting.com/ppablog/2008/02/18/compelling-decision-from-court-in-cigna-cash-balance-class-action-case/ Published by Suzanne L. Wynn, Esq., LLM Tax. of Erisafile / Qualified Pension Consulting Inc. Sat, 05 Nov 2011 17:33:01 +0000 hourly 1 http://wordpress.org/?v=3.1.1 By: Ken http://qualifiedpensionconsulting.com/ppablog/2008/02/18/compelling-decision-from-court-in-cigna-cash-balance-class-action-case/#comment-126 Ken Tue, 19 Feb 2008 16:46:37 +0000 http://qualifiedpensionconsulting.com/ppablog/2008/02/18/compelling-decision-from-court-in-cigna-cash-balance-class-action-case/#comment-126 Finally a court is getting 'it' correct. The Cigna Plan changes did not contain age discrimination. The technical changes were allowed by ERISA if they were done in the proper order with complete notification to all the plan members and covering the effects felt by all except in de minis amounts. What is quite clear in the judges’ wonderful ruling, CIGNA did not meet the all requirements of ERISA in implementing the changes. The incorrect and misleading statements were uncovered over the TEN years since the conversion. If everything involved were to be evaluated there may have been age discrimination present, not in the plan changes, but in the actions of those individuals misleading and outright covering up facts as to the effect of the changes on the older workers. Reading the decision was hard for someone like me because for 9 years I have gone through the same experience at another corporation. As Judge Kravitz implied, it is a sad time when the job Congress and other Government organizations have done is woefully in adequate to protect employees and regulate employers and direct proper plan administration. Equally sad is the fact that of the 1500 cash balance conversions over 10 years, only a handful have made it to court for a proper review. I can only hope that the remedies in this case will set a far reaching precedent for the 1000+ plans and thousands of participants that will never have their day in court or have Congress, IRS, DOL, and PBGC address the harm done to their retirement plans. Remedies must eliminate the wear away caused by the 'GREATER OF' A and B plan amounts and replace this with 'A plus B' conversion method. I would not be surprised to see a complete return to the prior plan formula for all employees at least for the Plan year 1999 if not until Cigna implements the conversion properly now. Cigna said they couldn't calculate the effects of the conversion to know how many people would be effected adversely. I think they will be doing that sometime soon. Finally a court is getting ‘it’ correct. The Cigna Plan changes did not contain age discrimination. The technical changes were allowed by ERISA if they were done in the proper order with complete notification to all the plan members and covering the effects felt by all except in de minis amounts. What is quite clear in the judges’ wonderful ruling, CIGNA did not meet the all requirements of ERISA in implementing the changes. The incorrect and misleading statements were uncovered over the TEN years since the conversion. If everything involved were to be evaluated there may have been age discrimination present, not in the plan changes, but in the actions of those individuals misleading and outright covering up facts as to the effect of the changes on the older workers.

Reading the decision was hard for someone like me because for 9 years I have gone through the same experience at another corporation. As Judge Kravitz implied, it is a sad time when the job Congress and other Government organizations have done is woefully in adequate to protect employees and regulate employers and direct proper plan administration. Equally sad is the fact that of the 1500 cash balance conversions over 10 years, only a handful have made it to court for a proper review. I can only hope that the remedies in this case will set a far reaching precedent for the 1000+ plans and thousands of participants that will never have their day in court or have Congress, IRS, DOL, and PBGC address the harm done to their retirement plans.

Remedies must eliminate the wear away caused by the ‘GREATER OF’ A and B plan amounts and replace this with ‘A plus B’ conversion method. I would not be surprised to see a complete return to the prior plan formula for all employees at least for the Plan year 1999 if not until Cigna implements the conversion properly now. Cigna said they couldn’t calculate the effects of the conversion to know how many people would be effected adversely. I think they will be doing that sometime soon.

]]>