According to a Hartford Courant news report, the ruling from US District Judge Dominic Squatrito means that 10,000 current and former CIGNA workers could become part of the December 2001 lawsuit. The lead plaintiff is Janice C. Amara, who works in CIGNA’s Retirement & Investment Services division in Hartford.
The suit centers on CIGNA’s January 1998 cash balance conversion. Plaintiffs’ attorneys say CIGNA’s conversion discriminated against older employees in the rate at which future benefits are earned.
The plaintiff lawyers also charged that:
- CIGNA placed illegal conditions on workers’ rights to earn future benefits
- the cash balance plan forced employees to give up previously earned early retirement benefits in order to receive future contributions
- CIGNA did not inform employees, as required by law, about the disadvantages posed by the pension plan.
CIGNA insists it did nothing wrong, the Courant said. Spokesman Wendell Potter told the newspaper: “We believe we acted properly and in the best interest of our employees, and we expect we will prevail.”
In a traditional plan, benefits are based on formulas that multiply the number of years worked by a percentage of a worker’s highest average salary – typically paid during the final years of employment. In cash balance plans, which have raised protests at many companies, the employer contributes a fixed percentage of a worker’s annual pay to a cash-balance account.