Compliance January 13, 2009

U.S. Supreme Court Turns Away AK Steel Review Request

January 12, 2009 (PLANSPONSOR.com) - The nation's high court has turned down a request to review a $46-million award to former steel workers in a long-running pension dispute over whipsaw calculations used in determining lump sum pension distributions.
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The U.S. Supreme Court’s decision came in a request by the   AK Steel Corp. Retirement Accumulation Plan for it to take a look at an April 2007 6 th  U.S. Circuit Court of Appeals case (See AK Steel Cash Balance Distributions Not Covered by PPA ) that kept intact the award for benefits and interest for the 1,250 former AK Steel workers.

The plaintiffs argued in their original lawsuit that their benefits were forfeited when the employer failed to do the whipsaw determination.

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The 6 th Circuit agreed with a lower court that the Employee Retirement Income Security Act (ERISA) required the plan to use the whipsaw calculation and the violation should be remedied through the payment of benefits under Section 502(a)(1)(B).

In its petition seeking review of the Sixth Circuit’s ruling, the plan argued that the remedy ordered by the appeals court was incorrect because the lawsuit was brought under Section 502(a)(1)(B)’s civil enforcement provision and that provision could not be used to remedy a statutory violation.

The U.S. Solicitor General recommended that the Supreme Court not grant review in the case (See  Govt. Lawyers Urge U.S. High Court to Pass on AK Steel Pension Appeal ).

The case is AK Steel Corp. Retirement Accumulation Pension Plan v. West,   U.S., No. 07-663, cert. denied  1/12/09.

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