Dismissing claims by plan participants who alleged the plan treated younger workers more favorably than older workers, US District Judge Legrome Davis of the US District Court for the Eastern District of Pennsylvania noted that the Treasury Department "has consistently stated that cash balance plans are not age discriminatory."
PNC Bank converted its traditional defined benefit pension plan to a cash balance arrangement in January 1999. Under the new cash balance formula, benefits that accrued under the defined benefit plan were restated in the form of opening hypothetical cash balance accounts.
According to
the
However, a participant group took PNC to federal court, alleging the conversion to a cash balance plan violated the Employee Retirement Income Security Act (ERISA) because:
Dismissing each claim in
turn, Davis first found that
the plan did not violate ERISA Section 204(b)(1)(B)
because some participants' benefits would not
increase for a number of years. Davis said the
participants had not proven that the plan would fail
ERISA's 133 1/3 percent antibackloading test. According
to
In reaching his
decision,
The case is Register v. PNC Financial Services Group Inc., E.D. Pa., No. 04-CV-6097, 11/21/05.