Pension De-Risking Case is Dismissed

The judge dismissed a class action against Verizon Communications challenging its decision to execute a “de-risking” transaction which transferred 41,000 retirees from its pension plan to Prudential Insurance Company of America. The de-risking transaction involved a transfer of $7.4 billion in plan assets to a Prudential group annuity contract. The transaction also prohibited lump-sum payouts.

The judge ruled that the plaintiffs failed to state a valid claim for fiduciary breach or for interference with protected rights under ERISA. However, he did allow the plaintiffs the ability to re-plead the case within 30 days and file an amended complaint.

For a summary of the case by Robert Newman of Covington & Burling, click here.

The case, Lee v. Verizon Communications Inc., is available here.