Benefits November 29, 2005

Conversation About Hitler Sparks Lawsuit

November 29, 2005 (PLANSPONSOR.com) - A former worker is suing the Dana-Faber Cancer Institute alleging retaliation after she complained of an insulting conversation with a co-worker.
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The Associated Press reports that Aliana Brodmann von Richthofen testified that a co-worker, who knew much of her family had been killed in the Holocaust, said she admired Adolf Hitler and that ‘He was an admirable leader.’ Von Richthofen alleges that when she complained to supervisors about the conversation, she was demoted and eventually forced to resign.

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Von Richthofen is suing the institute, two former supervisors and a human resources executive, according to the AP. She is seeking unspecified compensatory and punitive damages, as well as back pay and forward pay against the cancer institute.

An attorney for the Dana-Farber Cancer Institute said that the institute moved the two women out of the small office they shared and gave them separate workspaces so they would not have to interact with one another. ”They were conscientious, effective, and responsive to Miss von Richthofen’s complaint,” James Horgan said.

A trial in the case opened this week in Norfolk (Massachusetts) Superior Court.

Compliance November 28, 2005

Cash Balance Plan Foes Lose in PA Federal Court

November 21, 2005 (PLANSPONSOR.com) - Defenders of cash balance pension plans have won a legal victory with a ruling by a federal judge in Pennsylvania dismissing an employee challenge to the employer's conversion to the cash balance style.
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US District Judge D. Davis Legrome of the US District Court for the Eastern District of Pennsylvania issued the decision in a case involving Pittsburgh, Pennsylvania-based PNC Financial Services Group, which made the switch from a traditional pension to cash balance in 1999, Business Insurance reported.

Participants sued the financial services company in December 2004 with arguments that the plan discriminated against older workers (See  Class-Action Filed Against PNC over Cash Balance Switch ).

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The employees charged that the plan change violated the Employee Retirement Income Security Act (ERISA) for several reasons, including:

  • it resulted in the absence of benefit accruals for several years for some participants,
  • benefit accruals were more substantial for younger participants,
  • the plan change notification did not comply with ERISA,
  • the summary plan description violates ERISA,
  • the defendants did not meet their fiduciary duties.

The case is Sandra Register vs. PNC Financial Services Group Inc.

The switch from defined benefit plans to cash balance plans has been controversial, (See One Bad Apple ). Other companies that have made the switch include IBM, AT&T, Xerox, and CIGNA. CitiGroup was also sued over a similar move (See Citigroup Sued Over Cash Balance Plan ).

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