Defined Pension to Cash Balance Conversion Suit by Duke Energy Workers

[papau]

According to a lawsuit filed by six former and current employees this week, Duke Energy committed age discrimination and violated pension laws when it converted to a cash balance plan in 1997 when Duke "made drastic changes" to its pension plan and "older workers lost thousands of dollars in the value of their pensions after putting in decades of work" for the company, the suit contends, according to the Charlotte Observer. The lawsuit,filed in federal district court in South Carolina, echoes a landmark discrimination and pension suit against IBM for its cash balance conversion.

http://www.charlotte.com/mld/charlotte/business/13826545.htm

Duke Energy Workers Sue Over Cash Balance Conversion
February 9, 2006 – <snip>Plaintiffs are asking that the suit be certified as a class action, for an overhaul of the company's retirement plan with oversight by a third party, and unspecified monetary damages for lost benefits and interest.

The Duke plaintiffs allege that the cash balance plan unfairly harmed older workers in violation of the Employee Retirement Income Security Act (ERISA) and the Age Discrimination in Employment Act (ADEA). Duke made the change in 1997. The Duke suit mimics a closely-followed legal battle by IBM participants against the computer maker over its cash balance change. IBM lost that case and in 2004 agreed to pay $300 million to thousands of older workers (See Murphy Approves Partial IBM Cash Balance Proposal).
<snip>
"
=============================================================================
For reference: US District Court for the Southern District of Illinois federal Judge Murphy approved the partial IBM Cash Balance Proposal on August 9, 2005 under which IBM will pay in the form of enhanced benefits more than $300 million to plan participants with claims surrounding IBM's conversion of a traditional final-average-pay plan to a pension equity plan, as reported by Business Insurance. reported.

Under the other part of the settlement, IBM has appealed to the US 7th Circuit Court of Appeals in Chicago the Murphy 2003 ruling that its cash balance plan, which IBM set up in 1999 to succeed the PEP plan, discriminated against older workers If IBM loses, its liability will be capped at $1.4 billion, according to the report.

Since the partial settlement was proposed, IBM has frozen its cash balance plan, with employees hired as of January 1, 2005, receiving pension coverage under an enriched 401(k) plan

The Internal Revenue Service imposed a moratorium on new cash balance plans in 1999 amid uncertainty over the effect on workers, but under Bush the moratorium has been replaced by U.S. Department of Labor "strict rules under which companies can institute the plans."

[Lasher]

1. Any news about when there is going to be movement in the IBM case?

I thought the remainder of the IBM case was headed for the Supreme Court, but I guess it's going to the 7th Circuit Court of Appeals.