Monday, February 05, 2007
Lots of companies now have cash balance plan for their employees' retirements, so this is an issue of great importance. If such plans are found to violate the anti-discrimination provision of ERISA, all such plans would be invalid.
The Seventh Circuit has previously rejected a claim similar to that of the plaintiffs, and their is a split among the district courts, with the majority of the district courts from the Second Circuit taking a view opposite to that of the Seventh Circuit. (One Southern District of New York case, however, is in accord with the Seventh Circuit.)
The Third Circuit agreed with the Seventh Circuit in what I consider to be a well-reasoned opinion. You can read the decision here. In footnote 10 of the opinion, the Courts states: "It seems to us to be inevitable that the Court of Appeals for the Second Circuit ultimately will decide the discrimination issue for that circuit." And indeed, the district court cases decided in the Second Circuit were all decided in 2006. So when the Second Circuit does come down with a decision in one of them, I will let you know.