Cash balance litigation is one the hottest topics being litigated in federal courts. As companies look to cut pension costs they often try and convert their pension plan to a “cash balance plan.” A hybrid type plan, this retirement vehicle operates more like a defined contribution plan (e.g. 401K) rather than a defined benefit plan (e.g. a traditional pension). The problem is that although cash balance plans may look like a 401K -- they are governed under the rules of a pension plan. These two sets of laws do not necessary mesh well; especially when it comes to rules regarding age discrimination in pension benefits. Trying to save money by changing their benefit plans, companies are now facing lawsuits for age discrimination as benefits sometimes decrease as a participant gets older. In addition, disclosure on how a company chooses to tell its employees that they may be getting less benefits than before has become a serious concern. The bottom line here is companies with cash balance plans are under attack for litigation that discriminates based on age and also for failing to properly disclose the change in benefits. If you are an employee with a cash balance plan that believes this has happened to you or an employer looking for counseling or litigation defense on these issues, Feldman, Fox & Morgado has lawyers that have dealt with these issues before. Please email us here with a short synopsis of your situation. |
