The U.S. Supreme Court gave a partial victory to Cigna Corp. (CI) in a pension fight, setting aside a ruling that required the company to recalculate the benefits for 27,000 workers.
The dispute stemmed from Cigna’s 1998 conversion of its pension plan into a so-called cash balance plan. The workers said they didn’t realize at the time that most of them would lose money as a result of the conversion. Two lower courts said workers were entitled to additional benefits.
The Supreme Court today unanimously set aside those rulings, saying the workers needed to show that they were harmed by Cigna’s violation of a federal employee-benefits law.
The justices stopped short of requiring the workers to show that they relied on plan summaries that a trial judge concluded were misleading.
Cigna in 2008 took a pretax charge of $80 million to cover its estimated liabilities in the case.
Cash balance plans are hybrids that combine elements of traditional employer-funded defined-benefit plans with the transferable personal accounts that are common to 401(k)-style defined-contribution plans.
The case is Cigna v. Amara, 09-804.