Yesterday afternoon the Seattle-based law firm of Hagens Berman announced that it was “investigating potential claims” against several large employers, after “…a recent US Supreme Court ruling calls into question the company’s actions in converting its pension plan to a cash-balance plan.”
The case in question is likely CIGNA Corp. v. Amara (see Supreme Court Sends Back Cash Balance Notice Decision), where the Supreme Court sent back for further review a case involving a cash balance conversion. The District Court had found that the plan’s disclosures about the conversion not only violated its obligations under §§102(a), 104(b), and 204(h) of the Employee Retirement Income Security Act (ERISA), but then proceeded to “reform” the plan.
The Supreme Court rejected the remedy, but sent it back for additional consideration, alongside what many have seen as a roadmap for crafting a more “appropriate” remedy.
Hagens Berman issued a series of press releases yesterday announcing that it was investigating whether the firms in question “fully disclosed the possible disadvantages of the new plan to its employees”, and indicated its interest in speaking with “employees or former employees” of the firms in question “who feel that the company did not fully disclose the risks associated with the transition to a cash balance plan”. In fact, these “investigations” are widely seen as a precursor to litigation, once the requisite class action members have been identified.
The firms targeted at this point are Coca-Cola, SunTrust Banks, MeadWestvaco Corporation, FedEx, and Dow Chemical.