One of the cases I’ve covered on this blog since the beginning, was a lawsuit challenging CIGNA’s change from a traditional defined benefit plan to a cash balance plan.
In plain English, it was basically (and I’m oversimplifying) a conversion from a pension plan to a 401(k) plan.
That case has gone all the way up to the U.S. Supreme Court.
(And, in the interests of full disclosure, one of the named plaintiffs is a family friend who attended my wedding many years ago.)
Today comes word that the matter is reaching a conclusion, in a report by Mara Lee of The Hartford Courant.
Fifteen years after Cigna Corp. employees and former employees first sued over 1998 changes to the company pension plan, a federal court ordered the company in January to provide a list of all 27,000 people in the class-action lawsuit and how much each one is owed. There are 3,620 Connecticut residents in the lawsuit.
The conversion from a pension to a cash balance plan was legal, and did not discriminate against older workers, a U.S. District judge in New Haven found. But because the way the company described the changes was misleading, the court found Cigna liable for paying for what they are owed from the original pension, frozen at the end of 1997, plus additions to the lump sums the pensions were converted to.
Lawsuits like this one are rare. But after 15 years of pursuing the claims, the current and former employees look to finally get some closure on the matter later this year with payouts. The exact amount is still to be determined but the company has reserved over $180M for the potential payouts.