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Court certifies class action in pension calculation suit

by on
in Employee Benefits Program,Human Resources

The U.S. District Court for the Southern District of Texas recently certified a class action of current and former participants and beneficiaries of a cash-balance pension plan sponsored by United Way of the Gulf Coast.

The participants and beneficiaries claimed that the plan sponsor miscalculated early-retirement benefits when it switched the pension plan from a defined-benefit plan to a cash-balance plan. Specifically, they argued that the plan sponsor breached Section 204 of the Employee Retirement Income Security Act when it amended the plan without notifying the plan beneficiaries.

Judge Melinda Harmon found that the participants and beneficiaries satisfied such class-action requirements as “commonality” and “typicality” because their claims all arose from a dispute over the plan’s language.

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