The Hartford Courant
January 3, 2003
From Staff Reports
Suit Against CIGNA Can Be Class Action
A lawsuit that accuses CIGNA Corp. of discriminating against older employees
in the way it converted a pension plan has been approved to become a class
action.
The certification by Judge Dominic J. Squatrito in U.S. District Court
in Hartford could make more than 10,000 present and former CIGNA employees
part
of the
class, said Thomas G. Moukawsher, co-counsel for the plaintiffs and a partner
in the Hartford law firm Moukawsher & Walsh.
The lawsuit that was filed in December 2001 stems from CIGNA's Jan. 1,
1998 conversion from a traditional pension plan to a "cash balance" plan.
In a traditional plan, benefits are based on formulas that multiply the number
of years worked by a percentage of a worker's highest average salary - typically
paid during the final years of employment. In cash balance plans, which have
raised protests at many companies, the employer contributes a fixed percentage
of a worker's annual pay to a cash-balance account.
CIGNA spokesman Wendell Potter said Thursday, "We believe we acted
properly and in the best interest of our employees, and we expect we will
prevail."
But plaintiffs' attorneys say CIGNA's conversion discriminated against older
employees in the rate at which future benefits are earned. The company, they
say, placed illegal conditions on workers' rights to earn future benefits.
Also, the cash balance plan forced employees to give up previously earned
early retirement benefits in order to receive future contributions, the lawyers
say.
In addition, the lawsuit says CIGNA did not inform employees, as required
by law, about the disadvantages posed by the pension plan.
Potter noted that "the fact that the case was certified has nothing
to do with the merits of the case."
The lead plaintiff is Janice C. Amara, who works in CIGNA's Retirement & Investment
Services division in Hartford.
Philadelphia Inquirer
Saturday, January 4, 2003
Business news in brief
IN THE REGION
Judge OKs Class-Action Suit Over Cigna Pension Change
A federal judge has certified a class-action lawsuit contending that a decision
by Cigna Corp. and its pension plan to convert to a cash-balance pension plan
placed illegal conditions on workers' rights to earn future benefits and discriminated
against older employees. The Dec. 20 decision by U.S. District Judge Dominic
J. Squatrito in Hartford, Conn., will allow claims that could affect more than
25,000 Cigna employees nationwide, according to a statement by attorney Stephen
R. Bruce of Washington. The suit also contends that Cigna, Philadelphia, did
not properly inform its employees about the ramifications of switching from
a traditional plan to a cash-balance plan. Cigna spokesman Wendell Potter said
the company acted properly and in the best interest of its employees. The lead
plaintiff, Janice Amara of Hartford, is a principal in the company's retirement
and investment services division. She was once a pension compliance officer.
