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Compliance March 6, 2004
Xerox Walks Away with Pension Suit Victory
June 27, 2002 (PLANSPONSOR.com) - Xerox Corporation
was under no obligation, in terms of ERISA, to allow rehired
workers to buy back into the company's pension plan, a
federal judge decided.
Reported by Fred Schneyer
Judge David Larimer of the US District Court for the Western District of New York said that ERISA’s only buyback requirement comes into play if a pension plan doesn’t properly credit prior service and if there has been a forfeiture.
Larimer also rejected claims by 96 current and former Xerox workers that the company improperly deducted from their current pension benefits a prior lump-sum pension payout received before Xerox rehired them.
The employees sued, alleging that the method used to calculate the deduction of the lump-sum distribution violated ERISA. Larimer rejected claims that Xerox also violated ERISA by interfering with the employees’ ability to receive benefits.
“Given that 89 out of the 96 plaintiffs are currently employed by Xerox, and that not one of the 96 plaintiffs has alleged that the employer-employee relationship was adversely affected at all, and certainly not by any specific intent to deprive them of ERISA protected benefits, defendants’ allegedly improper or incorrect calculation of plaintiffs’ benefit amounts could not possibly amount to a violation [of ERISA],” the court said.
Larimer’s ruling leaves the workers’ ERISA claim under Section 502(a)(1)(b) standing.
The case is Frommert v. Conkright, W.D.N.Y., No. 00-CV-6311L, 6/3/02.