Judge Allows Verizon Pension Fund Class Action to Proceed

By on April 2, 2013

Retirees have the right to be part of a class action against Verizon Communications Inc. over the transmission of its pension plan to Prudential Insurance, a Dallas federal judge concluded.

In December, Verizon transferred the requirement to disburse pensions for 41,000 retirees to Prudential, along with $7.5 billion in funds.  The Association of BellTel Retirees attempted to prevent the transfer, on the grounds that it would wane the legal safeguards for retirees.  A transfer of this variety would change the defined-benefit pensions into annuities to be distributed by Prudential.

Annuities do not fall under the Employee Retirement Income Security Act — a federal act which protects retirement assets by implementing guidelines that qualified plans must follow to ensure that plan fiduciaries do not misuse plan assets.

“This case is likely to be closely watched by employee benefits leaders at thousands of companies across America, with the outcome impacting the management of trillions of dollars in ERISA protected pension assets, clarifying plan sponsor and plan fiduciary obligations, and underscoring the rights of plan participants.” said Curtis Kennedy, a lawyer for the plaintiffs, in a statement that was picked up by Bloomberg.

Attorneys Curtis L. Kennedy of Denver and Robert E. Goodman, Jr., of Dallas are representing the class of retirees.

The case is before Chief Judge Sidney A. Fitzwater (Case No: 3:12-CV-04834-D).