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Compliance November 23, 2005
Plan Administrator Cleared in Company Stock Loss Lawsuit
November 23, 2005 (PLANSPONSOR.com) - A federal
judge in New York has turned away arguments by a plan
participant who claimed he lost more than $350,000 when his
former employer allegedly delayed liquidating the company
stock portion of his plan distribution.
Reported by Fred Schneyer
US District Judge Charles Siragusa of the US District Court for the Western District of New York ruled that Corning Inc. pension plan administrator did not breach its fiduciary duties in its handling of the stock. Siragusa said Corning, as plan administrator, did not act arbitrarily and capriciously when it used the participant’s termination date as supplied by Corning’s human resources department.
Plaintiff G. James Piazza had alleged that his Corning job actually ended September 15, 2000, and that Corning unreasonably delayed 52 days in distributing to him his Corning common stock held in Corning’s pension plan. Piazza alleged that the 52-day delay caused his market losses because the market value of Corning stock was rapidly decreasing during that time.
Piazza sued Corning under the Employee Retirement Income Security Act (ERISA), alleging it breached its fiduciary duties by delaying his distribution. According to the court, although Piazza claimed that he severed his employment with Corning on September 15, 2000, Corning’s human resources department considered Piazza’s termination date to be October 3, 2000. Under the plan’s terms, Piazza was required to wait 30 days from the date of his employment termination before he could get a distribution of his Corning common stock held in his plan account, the court noted.
The case is Piazza v. Corning Inc., W.D.N.Y., No. 02-CV-6412-CJS(F), 11/18/05).