Jottings By An Employer's Lawyer

Tuesday, January 30, 2007

Cash Balance Plans (At Least PNC's) Ok - 3rd Cir.

One of the more hotly contested issues in the world of benefits (at least as viewed by a non-benefits lawyer) has been whether or not conversion to cash balance pension plans is permissible or age discrimination in violation of ERISA.

The 3rd Circuit weighs in with an opinion that both serves as somewhat of a primer about cash balance plans — they are a hybrid between defined benefit and defined contribution plans, first developed after ERISA was passed with rules for the latter two types of plans — and in agreement with last summer's decision by the 7th Circuit holding that IBM's cash balance plan was not discriminatory.

The details can be found in today's holding in Register v. PNC Financial Services, Inc. (3rd Cir. 1/30/07) [pdf].


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