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Compliance November 15, 2006
Court Rebuffs Cash Balance Ruling Reconsideration Request
A federal judge has rebuffed the latest effort by FleetBoston Financial Corp. to derail a lawsuit charging that its cash balance plan discriminates against older workers.
Reported by Fred Schneyer
US District Judge Janet Hall of the US District Court for the District of Connecticut denied FleetBoston’s request to either reconsider her March 2006 ruling (See FleetBoston Cash Balance Suit Moves Forward) that a FleetBoston employee could proceed with her cash balance suit or allow the bank to take the matter up to the 2nd US Circuit Court of Appeals.
Lawyers for FleetBoston/Bank of America said they should be given a chance to argue to the appellate court that Hall should follow two recent federal court rulings that found that cash balance plans are not age discriminatory.
In her rulings in the case, Hall rejected the findings of other federal courts that Employee Retirement Income Security Act (ERISA) Section 204(b) (1) (H)’s reference to “the rate of an employee’s benefit” accrual should be measured by the change in the balance of each participant’s hypothetical cash balance account (See Rules/Regs: Hanging in the Balance).
Instead, Hall asserted that Section 204(b) (1) (H) requires that “the rate of an employee’s benefit accrual” be measured solely in terms of an annuity payable at normal retirement age.
The case is Richards v. FleetBoston Financial Corp., D. Conn., No. 3:04-cv-1638 (JCH), October 16, 2006.