6th Circuit Latest to Reject Cash Balance Age Discrimination Claims
This was the ruling Monday by the 6 th U.S. Circuit Court of Appeals in a challenge by participants in the Rand McNally & Company Pension Plan, which was later merged into the World Color Press Cash Balance Plan.
In writing for the court, Circuit Judge John M. Rogers asserted that U.S. District Judge Karl S. Forester of the U.S. District Court for the Eastern District of Kentucky was correct when Forester rejected the plaintiffs’ contention that the World Color plan discriminated against older workers in violation of the Employee Retirement Income Security Act (ERISA) (See Cash Balance Plan not in Breach of Age Discrimination Laws ). Employees of Rand McNally Book & Media Services became World Color employees when World Color purchased Rand McNally Book in January 1997, according to the opinion.
“Contrary to the plaintiffs’ assertions, cash balance plans do not discriminate based on age in violation of ERISA 204(b) (1) (H) (i),” Rogers wrote. “The plaintiffs’ argument is that ‘cash balance plans per se violate the provisions of ERISA.’ Accordingly, plaintiffs’ claim turns on the nature of cash balance plans in general and not upon any particular or unique provision of the World Color Plan.”
Rogers continued: “The contention that cash balance plans are necessarily age discriminatory under the terms of 204(b)(1)(H)(I) fails, however, because that provision of ERISA addresses only the employer’s contribution to the benefit plan, and any disparity in the benefits that employees of different ages would receive from cash balance plans is merely the result of time value of money.”
Rogers and his 6 th Circuit colleagues drew on a recent ruling by a fellow federal appellate court, the 3 rd U.S. Circuit Court of Appeals, in deciding that cash balance plans were not age discriminatory (See Cash Balance Proponents Get Two Legal Victories ).
Rogers also referred to the 7 th U.S. Circuit Court of Appeals in the now famous case involving IBM’s cash balance plan – the first federal appellate court to rule on the cash balance age discrimination issue (See IBM Cash Balance Discrimination Ruling Reversed ).
Monday’s 6th Circuit ruling is here .
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