Plaintiffs Larry Wheeler, David and Maral Keeton and Vincent Parisi filed the suit seeking class-action status against the Pension Value Plan for Employees of The Boeing Company, according to a Madison St. Clair (Illinois) Record news report. The case was filed under the Employment Retirement Income Security Act (ERISA) in the US District Court for the Southern District of Illinois claiming that the plan used an illegal method of benefits calculation.
According to the suit, the plaintiffs’ employment
was transferred to Boeing on August 1, 1997, after the
merger. They claim their retirement benefits are less
than the accrued benefit to which they are legally
entitled because the plan didn’t properly apply accrual
and vesting rules imposed by ERISA.
The plaintiffs charge that the plan violates ERISA’s anti-back loading provisions because it makes benefits accrue very slowly over time until the participants near the normal retirement age so that a participant’s vested pension rights have very little value until they complete a very long period of service, according to the news report.
“ERISA requires that a defined benefit plan must allow a participant to accrue, i.e. earn benefits no less that ratably over a working career so as to prevent employers from using creative plan designs to avoid the protection afforded by ERISA’s vesting rules,” the complaint charged.