Preliminary Approval Given to Settlement of WaMu Cash Balance Suit

July 29, 2010 ( – A federal judge has given preliminary approval to a $20-million settlement of claims against Washington Mutual concerning its conversion to a cash balance pension plan.

In December 2007, U.S. District Judge Marsha J. Pechman of the U.S. District Court for the Western District of Washington dismissed claims by a group of Washington Mutual employees that the company’s cash balance plan benefit formula discriminates against participants based on age (see Court Dismisses WaMu Cash Balance Plan Discrimination Claim). However, she moved forward claims of employees who were participants in the company’s defined benefit plans at the time of their conversion to a cash balance plan under the Employee Retirement Income Security Act Section 204(h) that WaMu failed to give them timely notice of the conversion.  

The Preliminary Approval Order says the $20 million will be distributed to plaintiffs on a per capita basis minus fees for plaintiffs’ attorney Keller Rohrback (see WaMu Cash Balance Plan Draws Scrutiny), and up to $1 million in fees for WaMu’s attorney Sidley Austin incurred during distribution of the settlement.   

A fairness hearing is scheduled for October 29.