Bloomberg News reported that the justices, without comment, rejected an appeal of the decision by Rohm & Haas Co.
In granting summary judgment to a class of retirees covered under the Rohm and Haas Pension Plan, the appellate court pointed out that the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code prescribe that if a defined benefit pension plan allows for a lump-sum distribution, that distribution must equal the present value of the accrued benefit expressed in the form of a single-life annuity (See COLAs Must be Included in Lump-Sum Benefits for DB Participants ). The court said that by not including the COLA in the calculation of lump-sum benefits, the plan violates ERISA’s anti-cutback rule.
The August 2007 ruling by the 7 th Circuit prompted Rohm & Haas to take a third-quarter charge of $42 million, or 20 cents a share, Bloomberg said. The company also said it may need to record a charge of $25 million for the cost-of-living adjustment.