Judge Denies AT&T Request to Reconsider Cash Balance Ruling

January 3, 2007 (PLANSPONSOR.com) - Judge Janet Hall of the US District Court for the District of Connecticut denied AT&T Corp.'s motion to dismiss a lawsuit claiming its cash balance plan discriminates against older workers.

In her opinion, Hall said AT&T’s motion was essentially asking the court to reconsider its previous decision in Richards v. FleetBoston Financial Corp. that cash balance plans are age discriminatory under the Employee Retirement Income Security Act (ERISA) (See Court Rebuffs Fleet/BoA Cash Balance Ruling Reconsideration Request ). “While recognizing that its decision is contrary to several other courts,” Hall said the court will stick to its previous interpretation of ERISA.

Hall said the court’s opinion of the definition of “rate of benefit accrual” as used in ERISA’s section on age discrimination “refers to rate measured as a change in the annual benefit commencing at normal retirement age.” Saying ERISA was unambiguous in its definition, Hall determined there was no need to further analyze its meaning.

Additionally, Hall rejected AT&T’s argument that the claim was barred by the 180 day statute of limitations for Connecticut on age discrimination claims. She agreed with the plaintiffs that the cash balance plan was a contract and was guided by the statute of limitations for breach of contract claims under state law, which is six years.

The case is Parsons v. AT&T Pension Benefit Plan, D. Conn., No. 3:06cv552 (JCH), 12/22/06.