Verizon Communication Inc. management retirees may go forward with their federal lawsuit related to the pension buyout deal Verizon purchased from Prudential Insurance Co. of America, according to a U.S. District Court ruling last week.
U.S. District Court Judge Sidney Fitzwater in Dallas ruled that the class of about 41,000 retirees who were affected by the transfer could sue as a group. He also ruled that another 50,000 plan participants whose benefits were not part of the transfer could also sue. Verizon had filed a motion Feb. 25 to dismiss the lawsuit.
The common questions of law cited in Judge Fitzwater's ruling were whether the transaction violated ERISA Section 404(a), whether the plan's summary plan description satisfied the requirement to disclose the circumstances that might result in a loss or reduction of benefits, and whether the transaction violated ERISA's non-discrimination provision.
The lawsuit, filed Nov. 27, attempted to halt the pension annuity deal. Judge Fitzwater on Dec. 7 denied the preliminary injunction to block the transaction. That ruling led to the close of the deal on Dec. 10 for Verizon to purchase a group annuity contract from Prudential to transfer $7.5 billion in pension obligations, about 25% of the company's overall pension liabilities.
A Verizon spokesman declined comment.
Rob Kozlowski writes for www.pionline.com Pensions & Investments a sister publication of Business Insurance.