ADEA

7th Circuit Finds No Age Bias in Cash Balance Plan's Interest Credits
Excerpt:"A cash balance plan was not age-discriminatory, even though participants stopped receiving interest credits on one of the cash balance accounts at age 55, the 7th US Circuit Court of Appeals has ruled (Walker v. Monsanto Pension Plan)."(Mercer LLC)

Monsanto Cash Balance Plan Cleared of Age Discrimination
Excerpt:"A provision in Monsanto Co.'s cash balance pension plan that cut off interest credits once participants reached age 55 did not discriminate against older workers, a federal appellate court has ruled."(PLANSPONSOR.com)

Ledbetter Law Fails To Save El Paso Workers'Cash Balance Plan Suit
Excerpt:"A federal judge has once again thrown out a suit claiming that El Paso Corp. discriminated against workers based on age when it modified a retirement plan, ending a long-running putative class action brought after the natural gas company converted its pension plan to a cash balance system."(Forbes.com)

[Guidance Overview] AT&T Cleared in Cash Balance Suit Alleging ERISA and ADEA Violations
Excerpt:"The decision . . . ends a 12-year court fight over allegations the company's operation of the pension program discriminated against older workers and violated ERISA's anti-backloading rule. [The judge] also cleared the communications company of violating U.S. Treasury Department regulations that require'subsidized early retirement benefits'to be the actuarial equivalent of the subsidized benefit."(PLANSPONSOR.com)

[Guidance Overview] Appeals Court Finds No Age Bias in Early Retirement Enhancement by Plan Sponsor
Excerpt:"A pension plan sponsor did not violate the Age Discrimination in Employment Act by accelerating some laid-off workers'eligibility for full early retirement benefits while paying reduced early retirement benefits to older workers affected by the layoff, the Eighth US Circuit Court of Appeals has ruled (Schultz v. Windstream Communications Inc.). The differential treatment was based on pension status rather than age, the court held, relying on the Supreme Court's 2008 ruling in Kentucky Retirement Systems v. EEOC."(Mercer LLC)

[Guidance Overview] Judge Rules Against Minnesota Corrections Department Early Retirement Incentive Plan
Excerpt:"A federal judge has ruled that an early retirement incentive plan at the state Department of Corrections discriminates against older employees. The U.S. Equal Employment Opportunity Commission on Monday announced the ruling in the age discrimination lawsuit that was filed in September 2008. The case centered on an early retirement plan that rewarded corrections employees who retired at age 55 with employer contributions for health and dental insurance until they turned 65. But under the plan, employees who retired after age 55 did not receive the employer contributions."(Minnesota Public Radio)

[Guidance Overview] EEOC Proposes Rule on Age Discrimination Defense
Excerpt:"The Equal Employment Opportunity Commission (EEOC) has proposed a rule to provide guidance on the meaning of'reasonable factors other than age'(RFOA) under the Age Discrimination in Employment Act (ADEA). The RFOA defense is one of several ADEA affirmative defenses and is particularly important to employers facing an allegation that a seemingly neutral employment action or policy had a disparate impact on older employees."(Towers Watson)

[Guidance Overview] Independent Contractors Not Protected by ADEA When Terminated
Excerpt:"A company was not in violation of the Age Discrimination in Employment Act (ADEA) when it dismissed an independent contractor and replaced her with a younger employee, the Eighth Circuit Court of Appeals ruled in Ernster v. Luxco, Inc. (No. 09-1200). The issue in the case involved whether Barbara Ernster was an independent contractor or an employee, because the ADEA and the Iowa Civil Rights Act (ICRA)'protects employees but not independent contractors.'"(Wolters Kluwer)

Supreme Court Declines to Review Cash Balance Age Rulings
Excerpt:"The Supreme Court on Feb. 22 declined to review, and thus let stand, lower-court rulings that a cash balance plan that defined'normal'retirement age as completion of five years of service is legal. Last year, in a unanimous decision, a three-judge panel of the 7th U.S. Circuit Court of Appeals in Chicago affirmed a lower court's ruling that the cash balance plan established in 2002 by Exelon Corp., Chicago, is legal."(Pensions&Investments)

Increase Predicted for 2010 Workplace Litigation by Report from Seyfarth Shaw
Excerpt:"Six key trends from the report are epitomized by the firm as follows: First, the plaintiffs'bar increased the pace of the Fair Labor Standards Act ('FLSA') collective action and the Employee Retirement Income Security Act ('ERISA') class action filings seeking recovery for unpaid wages and 401(k) losses. As lay-offs increased, displaced workers also filed more age discrimination and Worker Adjustment and Retraining Notification lawsuits. Even more litigation is expected in 2010, as businesses re-tool their operations."(Roy Harmon III via Health Plan Law)

Cash Balance Plan Wins in Eighth Circuit on Opening-Balance and Age-Bias Claims
Excerpt:"No ERISA violation occurred when a pension plan used an 8 percent interest rate to establish opening balances in connection with a 1998 cash balance conversion, the US Eighth Circuit Court of Appeals has ruled. Participants claimed the rate was too high, but the appeals court said the plan was free at that time -- before passage of the Pension Protection Act -- to set opening balances as it wished, as long as already-accrued benefits did not decrease. The court also dismissed participants'age-bias claims, consistent with rulings by five other appeals courts."(Mercer LLC)

After 40 Years, Age Discrimination Still Gets Second-Class Treatment
Excerpt:"Age discrimination is illegal. But when compared with discrimination against racial minorities and women, it is a second-class civil rights issue. The Supreme Court drove its inferiority home again in June of this year, ruling that older workers must show that age was the decisive factor in their firing -- not merely a contributing factor, which can be enough for a race or sex claim. Congress is considering overturning the ruling. It should do so. It is particularly important in the current downturn, with age discrimination complaints soaring. But the problem is larger than any one legal standard."(The New York Times; free registration required)

[Guidance Overview] U.S. District Court Says Cash Balance Plan ADEA Claim Not Time Barred Under Lilly Ledbetter Act (PDF)
2 pages. Excerpt:"In Tomlinson v. El Paso Corporation, a federal court in Colorado applied the Lilly Ledbetter Fair Pay Act to allow an age discrimination claim involving a cash balance plan conversion to proceed, reversing its prior dismissal of the lawsuit. The case involves a company that converted its traditional defined benefit pension plan to a cash balance plan in 1997 with a wearaway provision. Although the court initially dismissed the case for not being timely filed, it found that the subsequently enacted Ledbetter Act required it to reconsider this decision. While this is one court's ruling and is limited to Colorado, it demonstrates the potential reach of the Ledbetter Act beyond payroll practices to pension-related claims."(Buck Consultants)

Court Finds Ledbetter Act Revives Age-Bias Claim Arising from Cash Balance Conversion
Excerpt:"An active pension plan participant's age-bias challenge to a cash balance conversion may be timely, even though filed years after the plan change, a federal court has ruled (Tomlinson v. El Paso Corp.). The suit alleges that a'wearaway'period after the conversion discriminated against older employees. Last Jan. 21, the court had held that the claim was not filed soon enough after the conversion. Now the court has overturned its own ruling in the wake of the Jan. 29 enactment of the Lilly Ledbetter Fair Pay Act. The new ruling addresses only the timeliness, not the merits, of the claim."(Mercer LLC)

2009 Q&As: EEOC Meeting with ABA Joint Committee on Employee Benefits (PDF)
3 pages; May 6, 2009. Excerpt:"Each year, the Joint Committee on Employee Benefits (JCEB) of the American Bar Association meets with officials of federal agencies in Washington, D.C., to discuss issues of interest to employee benefits practitioners. . . . The question and answer transcripts . . . are based on these informal discussions between private sector representatives of the JCEB and agency officials."(American Bar Association)

[Guidance Overview] EEOC's New Guidance on Discrimination Waivers and Releases
Excerpt:"On July 15, the Equal Employment Opportunity Commission (EEOC) issued a new guidance document concerning discrimination waivers and releases contained in employee severance agreements. The full text of the guidance, titled'Understanding Waivers of Discrimination Claims in Employee Severance Agreements'(EEOC Guidance), is available online at www.eeoc.gov/policy/docs/qanda_severance-agreements.html. The EEOC Guidance does not dramatically change the EEOC's detailed regulations concerning age discrimination waivers and releases, which center around the complex requirements imposed under the Older Workers Benefit Protection Act of 1990 (OWBPA). However, the new EEOC Guidance is important in several respects . . . ."(Morgan, Lewis&Bockius LLP)

EEOC Addresses Employment Discrimination Waivers
Excerpt:"New EEOC guidance helps employees and employers understand waivers of employment discrimination claims, which are often part of employee severance plans. The guidance spells out in Q&A format the requirements for valid waivers, including ADEA waivers; provides a checklist to aid employees deciding whether to sign waivers; and contains sample language that may be a useful starting point for employers drafting waiver agreements. The guidance responds to the recent spike in layoffs and the potential for charges of age discrimination."(Mercer LLC)

Puerto Rico Mandatory Retirement for Police Officers; Chronology of Events Leading to Exemption Under ADEA for Mandatory Retirement of Firefighters and Law Enforcement Officers
See items number 3 and 4 on the target page. (Cypen&Cypen)

[Guidance Overview] Recent Rulings Suggest Plaintiffs May Need To Prove Discriminatory Motive To Prevail under ERISA's Rate of Accrual Provision, Section 204(b)(1)(H)(i) (PDF)
Pages 6-7 of 9 pages. Excerpt:"ERISA ? 204(b)(1)(H)(i), 29 U.S.C. ? 1054(b)(1)(H)(i), prohibits the reduction or cessation of the rate of benefit accrual in defined benefit plans'because of the attainment of any age.'A series of rulings by the Seventh, Third, Second, Sixth and Ninth Circuits rejected claims that, since younger workers had more years to accrue interest credits under cash balance pension formulas, those formulas inherently violated Section 204(b)(1)(H)(i). In so ruling, these courts reached the commonsense conclusion that ERISA did not make unlawful the time value of money."(Proskauer Rose LLP)

[Guidance Overview] Supreme Court Makes It More Difficult for Employees to Prove Age Discrimination Claims (PDF)
Excerpt:"The U.S. Supreme Court held in a 5-4 decision that a plaintiff bringing a disparate treatment claim under the Age Discrimination in Employment Act of 1967 (ADEA) must prove, by a preponderance of the evidence, that age was the'but-for'cause of the adverse employment action. Gross v. FBL Fin. Servs., Inc., No. 08-441 (June 18, 2009). The Court's adoption of a but-for causation standard is a departure from the burden of persuasion that courts had used when analyzing ADEA claims."(Sutherland)

[Guidance Overview] Supreme Court Makes It Harder to Prove Age Discrimination in Employment Actions
Excerpt:"In a 5-4 decision issued on Thursday, the United States Supreme Court made it much harder for plaintiffs in cases under the Age Discrimination in Employment Act ('ADEA') to prove discrimination. The Court held in Gross v. FBL Financial Servs, Inc., that a plaintiff in an age discrimination case must prove, by a preponderance of the evidence, that age was the'but for'cause of the challenged adverse employment action."(Nixon Peabody LLP)

[Guidance Overview] Supreme Court Decides that Title VII Mixed-Motives Analysis Does Not Apply to Age Discrimination Claims
Excerpt:"The U.S. Supreme Court in Gross v. FBL Financial Services, Inc., No. 08-441 (June 18, 2009) has held that the burden-shifting analysis that is available in so-called mixed-motives cases under Title VII does not apply to claims under the Age Discrimination in Employment Act (ADEA). Rather, the Court held that a plaintiff bringing a disparate treatment claim under the ADEA bears the burden of proving by a preponderance of the evidence that his or her age was the'but-for'cause of the challenged adverse employment action. In other words, even if there is some evidence that age was a factor in the challenged employment decision, the plaintiff cannot prevail unless he or she can prove that, but for his or her age, the employer would not have taken the challenged action."(Littler Mendelson P.C.)

[Guidance Overview] Supreme Court Ruling that'Motivating Factor'Standard Not Allowed Under ADEA (PDF)
2 pages. Excerpt:"Last week, the United States Supreme Court ruled (5 to 4) that employees bringing disparate-treatment claims pursuant to the Age Discrimination in Employment Act (ADEA) must prove that age was the'but-for'cause of the challenged adverse action, rather than simply a'motivating factor'. (Gross v. FBL Financial Services, Inc., __ U.S. __, 2009 WL 1685684 (2009). The Supreme Court further ruled that the burden-shifting framework set forth in Price Waterhouse does not apply to ADEA cases. (Price Waterhouse v. Hopkins, 490 U.S. 228 (1989))."(Winston&Strawn LLP)

[Guidance Overview] Supreme Court Ruling Increases Burden on Employees in Age Discrimination Cases
Excerpt:"On June 18, 2009, the U.S. Supreme Court issued a ruling substantially increasing the evidentiary burden imposed on plaintiffs in federal age discrimination cases. Whereas plaintiffs could previously establish age-based disparate treatment claims by showing their age was a'motivating factor'in the challenged employment decision (e.g., termination, demotion, failure to hire or promote), plaintiffs must now demonstrate their age was the'but for'cause of the challenged decision. In other words, employees must now prove their age was the reason why their employer took the disputed action, and not merely a reason that motivated the employer in making the disputed employment decision."(Pepper Hamilton LLP)

[Guidance Overview] U.S. Supreme Court Increases Employee Burden of Proof in Age Bias Cases (PDF)
2 pages. Excerpt:"In Gross v. FBL Financial Services, Inc., decided on June 18, 2009, a deeply divided U.S. Supreme Court imposed a heightened proof burden on employees to establish age discrimination against their employers. In a 5-4 decision, the Court concluded that the literal text of the Age Discrimination in Employment Act ('ADEA') does not allow a worker to prove discrimination by demonstrating that age was one'motivating factor'for the employer's adverse employment action. Rather, in the majority's view, workers must prove that age was the decisive factor or'but for'cause underlying the employer's adverse job action."(Haynes&Boone)

Getting it Right in Reductions in Force: How to Minimize Legal Risks (PDF)
8 pages. (Employee Benefit Plan Review via Jones Day)

[Guidance Overview] Requiring Older, Medicare-Eligible Retirees to Pay Larger Portion of Premium Contribution Under Health Plan Did Not Violate ADEA
Excerpt:"EBIA Comment: There have been few decisions to date applying the 2007 final EEOC regulations regarding Medicare coordination. Although not completely clear, it appears that this court found the Medicare coordination regulations and the equal benefits/equal cost rule to be sufficient, independent grounds for dismissing the retirees'claims. While that may explain the court's limited analysis of the equal benefits/equal cost rule, it would have been helpful if the court had revealed more about why it thought benefits for older and younger retirees were considered equal, given the premium differences."(Employee Benefits Institute of America)

[Guidance Overview] And the Lilly Ledbetter Litigation Begins
Excerpt:"Among the ERISA-related community, [the Lilly Ledbetter Fair Pay Act of 2009] was heralded as an asteroid the size of Texas headed directly at the plan universe. This is because: (1) one of the major components of defined contribution and defined benefits plans is compensation; (2) one of the major components of defined benefit and cash balance plan litigation is the Age Discrimination in Employment Act of 1967 (ADEA) . . . ."(Pension Protection Act Blog)

[Guidance Overview] Cash Balance Suit Plaintiff Seeks Dismissal Rehearing
Excerpt:"An employee who had his age discrimination claim against a cash balance plan dismissed has asked a federal judge to reconsider the dismissal in light of the signing of the Lilly Ledbetter Fair Pay Act. Plaintiff Wayne Tomlinson argued that with President Obama's January 29 signing of the Ledbetter bill into law . . ., the U.S. Supreme Court's May 2007 ruling in Ledbetter v. Goodyear Tire&Rubber Co. (which the Ledbetter bill was intended to overturn) should no longer be considered controlling case law . . . ."(PLANSPONSOR.com; free registration required)

The Aftermath of the Cash Balance Controversy: Defining Age Discrimination for Traditional Defined Benefit Pensions
Excerpt:"The appellate decisions upholding cash balance pensions against the claim of age discrimination are unconvincing. Nevertheless, these decisions reach the proper result as a matter of pension policy. These decisions read the statutory term'benefit accrual'as meaning employer contributions for purposes of measuring for age-based pension discrimination in the defined benefit context. However unpersuasive this reading may be as a textual matter, it reaches a sound outcome in terms of pension policy. In particular, this reading of the pension age discrimination statutes enables employers sponsoring traditional, annuity-paying defined benefit pensions to control their costs by decreasing the annual growth of the accrued benefits earned by older employees."(Benjamin N. Cardozo School of Law via Social Science Research Network)

Northwest Target-Date DC Plan Escapes Legal Challenge
Excerpt:"A federal judge in Minnesota has rebuffed an age-discrimination challenge to Northwest Airlines'defined contribution plan, ruling the complex program's use of age as a factor for a benefits determination was permissible. Relying heavily on the legal reasoning in a long line of cash balance plan cases, U.S. District Judge Joan N. Ericksen of the U.S. District Court for the District of Minnesota ruled that the DC plan did not violate the Employee Retirement Income Security Act (ERISA) or the Age Discrimination in Employment Act (ADEA)."(PLANSPONSOR.com; free registration required)

[Guidance Overview] Second Circuit Reinstates Age Discrimination Case
Excerpt:"This is an important age discrimination case for the times we are in: Carras v. MGS 782 Lex, Inc. The Second Circuit Civil Rights Blog writes about it here. In [a previous post], I have written about how targeting for layoff those employees who are costing the company more when it comes to health care costs or pension costs is unlawful under ERISA Section 510. The Carras case, however, involved targeting for layoff an older employee who was costing the company more when it came to his salary. (Benefits were not discussed.) Unfortunately, the case involves what is probably a likely scenario in our day: an older higly-paid worker being replaced by a younger less-experienced worker for'cost-cutting'reasons."(Attorney B. Janell Grenier via Benefitsblog.com)

[Guidance Overview] Employment and ERISA Law Considerations When Reducing Workforce or Laying Off Employees
Excerpt:"Some of the laws that should be taken into consideration include the Family Medical Leave Act (FMLA), the Americans with Disabilities Act (ADA), the Uniformed Services Employment and Reemployment Rights Act (USERRA), the Older Workers Benefit Protection Act (OWBPA), the Employee Retirement Income Security Act (ERISA), Equal Employment Opportunity (EEO) laws and the Consolidated Omnibus Budget Reconciliation Act (COBRA)."(Aiken&Aiken)

[Guidance Overview] Trial Court Dismisses Retirees'Claims That Terminating Their Medical and Prescription Drug Benefits Violated the ADEA
Excerpt:"The court in this case appears to be the first to have applied the 2007 final EEOC regulations. The employers were able to use the regulations to successfully defend their coordination of benefits for Medicare-eligible retirees. But this isn't the end of the story. The employers have not defeated the retirees'life insurance benefit claims under the ADEA, and the retirees may be able to prove that they acquired vested rights to medical, prescription drug, and life insurance benefits. Thus, as in the past, employers who change their retiree benefits still run the risk of lawsuits, and should consult with legal counsel beforehand."(Employee Benefits Institute of America)

The Past and Future of the Age Discrimination in Employment Act
Excerpt:"How has the ADEA affected U.S. labor markets in the forty years since its passage? Is the ADEA well positioned to meet the challenge of population aging in the coming decades? These questions are the subject of a new working paper by researcher David Neumark,'The Age Discrimination in Employment Act and the Challenge of Population Aging'(NBER Working Paper 14317)."(National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext of Working Papers)

Summary Judgment Hearing Scheduled on Northwest Airlines Pilots'Lawsuit re: Northwest Airlines Money Purchase Plan for Pilot Employees
Excerpt:"Lewis, Feinberg, Lee, Renaker&Jackson represents a class of Northwest Airlines pilots in the lawsuit, who allege that the Northwest Airlines Money Purchase Plan for Pilot Employees, a'targeted'defined contribution plan, violates ERISA's rules on age-based reductions in the rate of benefit allocations, as well as the Age Discrimination in Employment Act and several states'age discrimination laws. The pilots also allege that ALPA violated its duty of fair representation to older and/or senior pilots in adopting the targeted plan."(Lewis, Feinberg, Lee, Renaker,&Jackson, P.C.)

Embarq's Motion to Dismiss ADEA Claim Granted - Termination of Retiree Medical Benefits Not Age Discriminatory
Excerpt:"The U.S. District Court for the District of Kansas has determined that Embarq Corp. and its former wireless company owner Sprint Nextel Corp. did not violate the Age Discrimination in Employment Act (ADEA) when Embarq dropped medical and pharmacy benefits for Medicare-eligible retirees."(PLANSPONSOR.com; free registration required)

Federal Judge Allows Class Action Suit Against Embarq and Sprint on Age Discrimination and Illegally Canceling Retirement Benefits
Excerpt:"The lawsuit, filed in U.S. District Court in Kansas City, Kan., claims that Embarq and Sprint violated federal law protecting retirement benefits and seeks to have those benefits restored. Plaintiff attorneys estimated the class action would cover around 13,000 former Embarq and Sprint workers."(The Hays Daily News Online)

A New Political Environment for Labor and Employment Issues (PDF)
4 pages. There are brief comments on Pay Discrimination, Executive Compensation, Pension Protection, and 401(k) Fiduciary Liabilities. (Morgan, Lewis&Bockius LLP)

[Guidance Overview] Discovery Responses Did Not Support Removal and ERISA Preemption in State Law Wrongful Discharge Case
Excerpt:"Plaintiffs walk a fine line when asserting claims under the ADA and state wrongful discharge laws. This recent district court opinion exemplifies a successful avoidance of ERISA preemption, but not without the trouble of removal and remand. The problem lies in the natural consequence of termination. Aside from loss of wages and compensation benefits, the plaitntiff will lose participation in employee benefit plans."(Attorney Roy F. Harmon III on Health Plan Law Blog)

[Guidance Overview] Ninth Circuit Ruling that Cash Balance Plans Do Not Discriminate Against Older Workers (PDF)
3 pages. Excerpt:"BUCK COMMENT. Because the Pension Protection Act of 2006 (PPA) has insulated cash balance plans from such challenges going forward, the discrimination issue only applies retroactively. This ruling by the Ninth Circuit, not usually considered a pro-business court, should largely end the litigation over whether cash balance plans are age discriminatory."(Buck Consultants)

Reports Show How AT&T's Cash Balance Design Created Periods of'Wear-Away'for Older Employees
Excerpt:"Documents relating to Engers v. AT&T Managment Pension Plan, C.A. 98-3660 (D.N.J.) include the following: Expert statistical report dated Sept. 23, 2008 of Robert A. Bardwell, Ph.D., of Bardwell Consulting, on the impact on older employees of the conversion of AT&T's defined benefit plan to a cash balance pension formula. Expert actuarial report dated Sept. 22, 2008 of Claude Poulin, F.S.A., on the periods of wear-away and benefit reductions produced by the conversion of AT&T's defined benefit plan to a cash balance formula."(Stephen R. Bruce and Zipin Web&Consulting)

The Age Discrimination in Employment Act: A Legal Overview (PDF)
19 pages. Excerpt:"This report provides an overview of the Age Discrimination in Employment Act (ADEA) and discusses current legal and legislative developments. . . . In addition, the Supreme Court recently handed down a series of decisions involving the ADEA during its 2007-2008 term, including Sprint/United Management Co. v. Mendelsohn; Federal Express Corp. v. Holowecki; Gomez-Perez v. Potter; Kentucky Retirement Systems v. Equal Employment Opportunity Commission; and Meacham v. Knolls Atomic Power Laboratory."(U.S. Congressional Research Service)

[Guidance Overview] Green Light for Hybrid Plans
Excerpt:"In Hirt, the US Second Circuit Court of Appeals ruled that cash balance plans do not violate federal age discrimination legislation. Following several other court decisions on this issue, the Second Circuit stated that while the benefits provided to younger employees are worth more than the same benefits provided to older employees, in terms of a retirement age annuity that could be purchased, that difference is the result of time and compound interest and does not constitute age discrimination."(Global Pensions)

Latest Ruling on Cash-Balance Plans Seen as Ending'Fear of Litigation'
Excerpt:"A fifth appeals court ruling that cash-balance pension plans do not violate age discrimination law almost certainly ends years of uncertainty and costly litigation that threatened their future, legal experts say. In a unanimous decision last week, the 9th U.S. Circuit Court of Appeals in San Francisco joined four other appeals courts in ruling that the plans do not discriminate against older employees."(Workforce Management; free registration required)

A Fifth Federal Appellate Court Upholds Cash Balance Plan Designs
Excerpt:"In a continuing trend of federal court rulings backing cash balance plans, the 9th U.S. Circuit Court of Appeals has ruled the plans do not discriminate against older workers in favor of their younger counterparts."(PLANSPONSOR.com; free registration required)

Ninth Circuit Rejects IRS Interpretation of ERISA's Anti-Backloading Rules
Excerpt:"'The court recognized what ERIC has long argued, plans that adopt a'greater of'transition are more generous to participants and do not conflict with the intent of ERISA's anti-backloading provisions,'said Ugoretz. In an important ruling of first impression, the Ninth Circuit also held that'wearaway'in cash balance conversions does not violate federal or state age discrimination rules. The court determined that in a conversion a participant's accruals may temporarily cease until the benefit under the new formula exceeds the benefit calculated under the old formula. [Links to the Ninth Circuit Decision and to the ERIC Amicus Brief are on the target page.]"(The ERISA Industry Committee)

Appeals Court Affirms Cash Balance Ruling
Excerpt:"The 9th U.S. Circuit Court of Appeals on Wednesday affirmed dismissal of age-discrimination allegations against the cash balance plan of Southern California Gas Co., Los Angeles. The decision in Hurlic vs. Southern California Gas Co., also rejected a Feb. 1 ruling by the IRS that said use of'greater-of'provisions in cash balance conversions could violate ERISA's anti-backloading provisions."(Pensions&Investments)

California Appeals Court Says the IRS Was Wrong About ERISA's Anti-Backloading Rule
Excerpt:"A U.S. Court of Appeals sided with corporations yesterday when it rejected an Internal Revenue Service interpretation of pension plan rules. At issue was whether pension plans that use so-called cash balance formulas violate provisions of the federal Employee Retirement Income Security Act (ERISA) and California state employment law."(CFO.com)

Pension Ruling a Partial Win for Both Sides - Appeals Court Says Cash Balance Plans Are Legal
Excerpt:"In a ruling that appears to have something for everyone, a U.S. appeals court in Pasadena decided Wednesday that Southern California Gas Co. did not discriminate against older employees when it converted its traditional pension to a cash-balance plan 10 years ago. But, the court said, the company owed its workers fair warning so that they could save more -- or find another employer. The ruling in Hurlic vs. Southern California Gas concurred with other recent appeals court rulings . . . ."(Los Angeles Times)

[Guidance Overview] Second Circuit Rules That Cash Balance Plans Are Not Inherently Age Discriminatory (PDF)
Pages 2-3 of 6 pages. Excerpt:"The Second Circuit ruling makes it quite likely that the age discrimination issue has been put to bed for cash balance plans. Although there is at least one appeal pending in the Ninth Circuit on this same issue, most anticipate that it too will follow the holdings and reasoning of the four Circuit Courts that have unanimously rejected these claims. Should the Ninth Circuit (or any other Circuit) rule to the contrary, however, there might still be a need for Supreme Court resolution."(Proskauer Rose LLP)

[Guidance Overview] Cash Balance Plans Are Not Inherently Age-Discriminatory, According to Second Circuit
Excerpt:"Ruling in two consolidated class action lawsuits, the Second Circuit U.S. Court of Appeals has held that cash balance plans are not inherently age-discriminatory, even prior to amendments made by the Pension Protection Act of 2006 (PPA). The cases are Hirt, et al. v. The Equitable Retirement Plan for Employees, Managers, and Agents, et al. and Bryerton, et al. v. Verizon Communications, Inc., et al. (Nos. 06-4757, 06-5190, and 07-1680)."(Wolters Kluwer)

[Guidance Overview] Supreme Court ADEA Cases Address Disability Pension Provision and Downsizing (PDF)
Excerpt:"This case clarifies that differential treatment based on pension status does not automatically correlate with age discrimination, but recognizes that discrimination can be shown where pension status is a proxy for age or a plan design is impermissibly motivated by age. To minimize potential exposure to age discrimination claims, employers should exercise particular caution in structuring benefit plans or programs that take age into account, such as phased retirement programs, or that base eligibility on pension status."(Buck Consultants)

[Guidance Overview] Supreme Court Issues Two Significant Employee Benefits Decisions, But Uncertainty Remains (PDF)
4 pages. Excerpt:"In its recent decisions in Kentucky Retirement Systems v. E.E.O.C. and Metropolitan Life Insurance Company v. Glenn, the United States Supreme Court addressed several important issues regarding the design of employee benefit plans and related litigation. Both decisions, however, have unfortunately left a number of significant issues undecided and may lead to confusion and uncertainty for litigants and courts alike."(Dechert LLP)

[Guidance Overview] Teacher Did Not Meet Early Retirement Plan's Minimum Age Requirement
Excerpt:"Without addressing the open question of whether the Iowa Civil Rights Act (ICRA) contemplates a cause of action for reverse age bias, the Iowa Supreme Court held that a school district did not violate ICRA's prohibition against age bias when it denied a teacher's application for early retirement incentives on the grounds that she did not meet the plan's minimum age requirement."(Wolters Kluwer)

[Guidance Overview] 2nd Circuit Finds Cash Balance Plans Do Not Offend ERISA Bias Rules
Excerpt:"The trial court judges, Judge Alvin Hellerstein in Hirt v. The Equitable Retirement Plan for Employers, Managers and Agents, 06-4757-cv and 06-5190-cv, and Judge Denny Chin in Bryerton v. Verizon Communications Inc., 07-1680-cv, decided in favor of companies accused of violating the rule against age bias."(New York Law Journal)

Cash-Balance Plans Not Discriminatory, Court Rules
Excerpt:"The 2nd Circuit Court of Appeals says that while the benefits provided to younger employees are worth more than the same benefits provided to older employees, that difference is the result of time and compound interest and does not constitute age discrimination."(Workforce Management; free registration required)

[Official Guidance] U.S. Second Circuit Court of Appeals Decision in Hirt v. Equitable, Decided July 9, 2008 (PDF)
15 pages. Excerpt:"Plaintiffs in two separate cases brought claims alleging that'cash balance'defined benefit plans violated the Employee Retirement Income Security Act's rule against age-based reductions in the rate of benefit accrual, 29 U.S.C.§1054(b)(1)(H)(i) (2005), as that rule existed prior to the amendment that took effect as of June 29, 2005."(American Benefits Council)

Cash-Balance Plans Not Discriminatory, Court Says - Fourth Appellate Ruling in Favor of Employers
Excerpt:"In a unanimous decision, the appeals court affirmed two separate lower court rulings finding that cash balance plans sponsored by Verizon Communications Inc. and Equitable Life Assurance Society -- now known as AXA Equitable Life Insurance Co. -- do not discriminate against older workers."(Financial Week; free registration required)

[Opinion] ERISA Doesn't Ban'Cash Balance'Plans; Second Circuit Joins Sisters
Excerpt:"The Second Circuit today joined the Third, Sixth, and Seventh Circuits in holding that a'cash balance'pension plan doesn't violate the Employee Retirement and Income Security Act of 1974 despite the fact that older employees (sort of) get less bang for their buck."(Barry Barnett)