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Supreme Court declines to review PricewaterhouseCoopers case

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Supreme Court declines to review PricewaterhouseCoopers case

(Reuters) — PricewaterhouseCoopers may face increased pressure to settle a decade-old lawsuit with a class of employees who took lump-sum retirement payments between 2000 and 2006 after coming up short on Monday in its bid for U.S. Supreme Court review.

The Supreme Court left in place a U.S. appeals court ruling that found that the Manhattan-based auditing giant violated federal benefits law by setting terms for when workers could fully vest in pension plans that were unrelated to retirement age.

PricewaterhouseCoopers has been fighting claims that its plan deprived certain workers of "whipsaw payments," which guarantee that participants who take lump-sum payments once they retire receive the full value of their accounts. The U.S. Congress eliminated mandatory whipsaw payments in 2006.

The accounting firm's pension plan required workers to achieve five years of service prior to vesting. The Employment Retirement Income Security Act mandates that employees be fully vested in pension plans once they reach "normal retirement age," though companies have latitude to define that term and it does not have to be the same age for every employee.

The workers suing PricewaterhouseCoopers had more than five years of service and say they were short-changed because they received lump-sum payments of only the cash balance of their retirement accounts without the additional amount from proper actuarial calculations.

The 2nd U.S. Circuit Court of Appeals in Manhattan ruled in 2015 that the company's plan ran afoul of ERISA's requirement that employers set vesting ages that have reasonable relationships to a normal retirement age for the industry, from 65 for office workers to 35 for baseball players.

PricewaterhouseCoopers asked the Supreme Court to review the decision, arguing that it conflicts with earlier rulings from other U.S. appeals courts and provides no specific guidance on what constitutes a reasonable relationship. That lack of clarity leaves employers, workers and plan administrators in the dark over whether their plans are valid, PricewaterhouseCoopers said.

The U.S. Chamber of Commerce and other business groups backed PricewaterhouseCoopers' bid for high court review.

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