Opinion

Amara v. Cigna Corp.

534 F. Supp. 2d 288
43 Employee Benefits Cas. (BNA) 1011
2008 U.S. Dist. LEXIS 11378
2008 WL 450421

Court: District Court, D. Connecticut
Filed: Feb 15, 2008
Status: Published
Author: Kravitz
On the bench: Mark R. Kravitz
Cited by: 31 cases
Authority: More cited than 91.8%

Vacated on other grounds by CIGNA Corp. v. Amara, 131 S. Ct. 1866 (2011)

finding that “in September 1997, several articles began to 45 appear on cash balance conversions at other companies, and in some cases, complaints by employees resulted in partial or complete rollbacks of the proposed changes”

How later courts described this case

finding that “in September 1997, several articles began to 45 appear on cash balance conversions at other companies, and in some cases, complaints by employees resulted in partial or complete rollbacks of the proposed changes”
finding that “in September 1997, several articles began to appear on cash balance conversions at other companies, and in some eases, complaints by employees resulted in partial or complete rollbacks of the proposed changes”
explaining that the plaintiff’s backloading argument was “unpersuasive” because “the change in accumulation rates . . . is not the result of a specific plan provision,” but is rather the result of a shift in plans
deciding that CIGNA made “materially misleading statements” about wear away

Written by the judges who cited it.

The opinion

MEMORANDUM OF DECISION

MARK R. KRAVITZ, District Judge.

Since the mid-1980s, hundreds of U.S. employers have converted their traditional defined benefit pension plans into what are known as “cash balance” retirement plans. In fact, according to the Pension Benefit Guaranty Corporation, over 1,500 cash balance plans and other similar hybrid plans were in existence as of 2003, providing pension benefits to over 8 million participants, approximately one-quarter of the total employee population covered by defined benefit plans.

See

Pension Benefit Guaranty Corp., Pension Insurance Data Book 2004, at 59-60 (2005),

available at

http://www.pbgc.gov/docs/2004databook. pdf. Like many other corporations, CIG-NA Corporation converted its traditional defined benefit plan to a cash balance plan, in 1998.

Despite their popularity among employers, cash balance plans have spawned considerable litigation. This case is yet another in a long list of cases challenging an employer’s conversion to a cash balance retirement plan under the Employee Retirement Income Security Act (“ERISA”).

Plaintiffs consist of a class of current and former CIGNA employees who participated in CIGNA’s traditional defined benefit plan before January 1, 1998 and have participated in CIGNA’s cash balance plan since that time.

See

Memorandum of Decision [doc. # 61]. Plaintiffs and Defendants raise numerous class, sub-class, and individual claims and defenses.

See

Order Under Federal Rule 23(c)(1)(B) [doc. # 241] (listing the class, sub-class, and individual claims and defenses). At the risk of over-simplification, however, the central issues in this case may generally be described as follows: whether CIGNA’s cash balance plan is age discriminatory or otherwise violates certain non-forfeiture and anti-backloading rules under ERISA; whether CIGNA gave the notices and other disclosures required by ERISA; and whether the information CIGNA provided its employees about the conversion and the cash balance plan in summary plan descriptions and other materials satisfied ERISA’s requirements.

The questions raised in this case are vitally important to both employers and employees (and their families). Given how profoundly significant retirement plans and planning are to the great majority of Americans — employees and employers alike — this is one area where the answers should be clear, explicit, and definite. Regrettably, however, the answers to the issues raised by these parties are not entire

*296

ly clear, in large measure due to the fact that ERISA, and the regulations under it, are often lamentably obscure — to describe them as a tangled web does not do them justice. On top of that, there are conflicting decisions around the country on identical issues, making planning for nationwide enterprises impossible. Difficult, time-consuming, and expensive litigation with uncertain results — such as this case represents — is assuredly not a sensible way to manage the Nation’s retirement system for either employers or employees. Sadly, at least for now, litigation appears to be the only option available to them.

In this case, the Court conducted a bench trial over seven days, hearing testimony (live and via deposition) from more than a dozen witnesses and receiving into evidence over 800 exhibits. The parties submitted detailed stipulations, proposed findings of fact and conclusions of law, and pre-trial briefs, and following trial, they submitted post-trial briefs and proposed findings of fact and conclusions of law. The Court also held a lengthy oral argument following completion of post-trial briefing. Counsel for each side distinguished themselves throughout this case by their skillful advocacy, professionalism, and civility. The Court is grateful to each of them.

In accordance with Rule 52 of the

Federal Rules of Civil Procedure,

the Court makes the following findings of fact and conclusions of law. As a preface to those findings and conclusions, the Court would note that these are close questions of law, involving complex and technical regulations, and the facts underlying this case are also complicated and extensive. Risking oversimplification, the Court can summarize as follows its general findings and conclusions to the key issues noted above: CIGNA’s Plan is not age discriminatory and does not violate the non-forfeiture and anti-backloading rules under ERISA; in effectuating the conversion to the cash balance plan, CIGNA did not give a key notice to employees that is required by ERISA; and CIGNA’s summary plan descriptions and other materials were inadequate under ERISA and in some instances, downright misleading. ERISA gives employers substantial leeway in designing a pension plan, and the Court believes that CIGNA’s Plan complies with the relevant statutory provisions. However, ERISA also emphasizes the importance of disclosure by employers to employees regarding the details of the company’s pension plan, to enable employees to plan for their retirement and to make decisions of profound importance for their lives. This is where CIGNA failed to fulfill its obligations; the company did not provide its employees with the information they needed to understand the conversion from a traditional defined benefit plan to a cash balance plan and its effect on their retirement benefits. As noted below, the Court will require further briefing on the issue of what remedies are required or appropriate in view of the Court’s rulings on liability.

I. Factual Background

The summary that follows, which is based upon the facts adduced at trial, is intended to provide general background information needed to understand the parties’ dispute. Further facts bearing directly on certain contested issues are discussed in later sections.

Background Regarding Retirement Plans. A traditional defined benefit plan provides an eligible employee with an annuity (an annual benefit payable for the life of the employee) that is calculated as a percentage of the employee’s salary multiplied by the employee’s years of service. “Salary” may be defined as the highest salary the employee achieved, an average of the employee’s salary over the last several years of service, or some other similar

*297

definition. For example, an employee might accrue a pension benefit beginning at age 65 of 1.5% of salary for every year of service; an employee who worked for the company for 30 years would then have an annual retirement benefit of 45% of salary. If a retirement plan defines “salary” as the employee’s highest salary, then the employee’s plan benefits would increase as the employee moves closer to retirement and enjoys the higher salary that typically comes with longer service. By design, participants in traditional defined benefit plans often earn most of their benefits in the last several years of service. Also by design, the employer bears the risk of fluctuations in interest rates or the market over the life of the retired employee.

Traditional defined benefit plans often offer subsidized early retirement benefits, which encourage employees to remain with the company until the benefits are available and then to leave. A subsidized early retirement benefit is a benefit payable before normal retirement age (often as of age 55) that has an overall value that is greater than the present value of the benefit payable at normal retirement age (usually age 65). If the employee does not retire at the earliest opportunity to obtain the subsidized early retirement benefit— say, 55 — -the value of that benefit diminishes with each passing year until it is completely lost as of the date of normal retirement — for example, by age 65.

By contrast to traditional defined benefit plans, defined contribution plans do not offer fixed assurances of annual benefits for life upon retirement. Instead, the employer contributes a certain amount (for example, 10% of each year’s salary) to the plan each year. Each employee is entitled to the money allocated to a separate individual retirement account, plus the upside risk of favorable investment returns. However, the employee bears the risk of fluctuations in interest rates or the market once the employer contributes the funds to the employee’s retirement account.

Cash balance plans “imitate some features” of defined contribution plans by referring to individual accounts and allocations,

Esden v. Bank of Boston,

229 F.3d 154, 158 (2d Cir.2000), but the accounts and allocations are only “hypothetical,” not real. The “employee has no actual account, the employer makes no contributions to the employee account, and so there is no account balance to which interest might be added.”

Berger v. Xerox Corp. Ret. Income Guarantee Plan,

338 F.3d 755, 758 (7th Cir.2003). Though they may imitate some of the features of defined contribution plans, cash balance plans are governed by the rules for defined benefit plans.

See Esden,

229 F.3d at 158 .

Cash balance plans were introduced in the mid-1980s, and hundreds of employers have adopted them since then. Recent estimates are that between one-quarter and one-third of large U.S. employers sponsor a cash balance plan.

See

Pension Benefit Guaranty Corp., Pension Insurance Data Book 2004, at 59-60. Though Plaintiffs in this case contend that cash balance plans discriminate against older workers (an issue the Court addresses below), depending on how the plan is configured, cash balance plans may provide advantages for both employees and employers. Because employees covered by cash balance plans earn benefits more evenly throughout their careers, those plans may provide increasingly more mobile employees more benefits than they could expect to receive under a traditional defined benefit plan, where benefits accrue primarily at the end of an employee’s career. The accounts are also familiar to employees who are increasingly comfortable with 401(k)-type programs. Often,

*298

cash balance plans (unlike many traditional defined benefit plans) provide for payment of a lump sum benefit, giving employees the ability to manage their funds during their retirement. For an employer, while cash balance plans are not inherently more or less costly than traditional defined benefit plans, converting to a cash balance plan can provide significant cost savings. For example, a 2004 Mellon Bank survey found that the long-term costs of plans converted to cash balance formulas were expected to decrease for 64% of plans.

See

Ex. 232, at 30;

see also

Ex. 28 (Interoffice Memo), at D12287 (“A cash balance approach allows us to provide the competitive benefit level of a defined contribution plan but reduce overall cost by earning more on our investments than we pay in the declared rate.”); Ex. 31 (email from Gerry Meyn), at D029113 (“A conversion to a cash balance plan clearly reduces the ultimate benefits paid, and, of course, lowers the net pension liability....”). Cash balance plans also allow employers to shed some or all of the risk of interest rate and market fluctuations during the employee’s life. See Trial Tr. 1001:13 to 1002:4 (Mr. Sher, Defendants’ expert, testifying that employees assume the risk of interest rate fluctuations with respect to annuities under cash balance plans).

In a cash balance plan, each eligible employee has a hypothetical account that receives benefit credits. One credit is referred to as a “pay credit,” and it is equal to a percentage of the employee’s salary. Pay credits can be defined in a number of different ways: they may be set as a fixed percentage of pay (5% of salary); they may be integrated with Social Security (3% of pay up to the Social Security wage base and 5% over the base); or they may vary with the employee’s age or service (4% each year to age 40 and 5% each year thereafter), referred to as “graded pay credits.” Cash balance plans also typically provide “interest credits,” determined by applying a specified interest rate to the employee’s hypothetical account balance. Some plans provide that the interest credit is a floating rate that changes annually or more frequently and is tied to a market rate, such as the yield on selected U.S. Treasury securities. Others allow the interest credit rate to float subject to a maximum (say, 8%) or a minimum (say, 4%), or both. Unlike with many traditional defined benefit plans, which pay benefits as an annuity and do not include a lump sum option, benefits under a cash balance plan often are payable as either a lump sum that equals the hypothetical account balance or an annuity based upon the value of the account balance.

Many cash balance plans are the result of conversions from traditional defined benefit plans, and there are a variety of ways in which employers may provide for the conversion and transition to the new plan. One approach is to freeze the benefits payable under the prior plan and at the same time provide for the employees to receive benefit credits (both pay and interest credits) under the cash balance plan going forward. The prior plan benefits continue to be paid under the terms of the prior plan and the cash balance benefits are paid under the new plan. Under this approach, the employee has essentially two separate pension benefits, with different rules, formulas, and procedures governing them. This is the so-called “A plus B” approach discussed at trial.

Other employers instead provide the employee with an opening account balance. There are a variety of ways of establishing the opening account balance, though no legal requirements governing the creation of opening balances. See Ex. 13, at MER01798 (a consultant to CIGNA advised the company that opening balances “could even be zero if you wanted”); Ex.

*299

533 (General Accounting Office Report), at 30 (“[Cjurrent federal law does not govern how plan sponsors set opening hypothetical account balances for cash balance plans.... ”).

One method of creating opening balances is to calculate the present value of the employee’s normal retirement benefit (an annuity commencing at normal retirement age, usually age 65) under the prior plan as of the conversion date. Such a plan typically would also provide that each employee would in any event never receive less than the benefit earned under the prior plan as of the date of conversion under the pre-conversion benefit formula. Depending on how the employee’s opening account balance and minimum benefit are calculated, the minimum benefit may be greater than the employee’s account balance. This is the so-called “greater of A or B” approach referred to in the testimony.

CIGNA’s Traditional Defined Benefit Plan. Before January 1, 1998, CIGNA had a traditional defined benefit plan for its employees, which will be referred to in this Opinion as “Part A.” Part A provided two benefit formulas depending upon the individual’s date of hire. Individuals hired before December 31, 1988 were known as “Tier 1 employees”; individuals hired after that date were “Tier 2 employees.”

Tier 1 employees received 2% of final three-year average pay for each year of service up to 30 years, less a Social Security offset. Tier 1 employees with 10 or more years of service also received a subsidized early retirement benefit; they could retire at age 55 and receive an immediate annuity benefit equal to the accrued age-65 benefit (not reflecting the Social Security offset, known as the “Social Security supplement”), reduced for early commencement by certain factors set forth in the Plan. Upon reaching age 65, the benefit would be reduced by the participant’s Social Security offset.

Tier 2 employees received an age-65 annuity benefit equal to 1.67% of final five-year average pay for each year of sendee up to 35 years, less a Social Security offset. Tier 2 employees also received subsidized early retirement benefits; a Tier 2 employee with 15 years or more of service could retire at age 55 and receive an immediate annuity benefit equal to the accrued age-65 benefit (not reflecting the Social Security offset), reduced by 5% per year if benefits began before age 65 (thus 50% for commencement at age 55). Upon reaching age 62, the benefit payable would be reduced by the Social Security offset (adjusted to age 62).

Tier 1, but not Tier 2, employees also were eligible for a “Free 30%” survivor’s benefit (the “Preserved Spouse’s benefit”). Under this benefit, a portion of a participant’s pension (generally 30%) would be payable after the participant’s death for the remaining lifetime of the surviving spouse. Many plans effectively require participants to pay for the added value of the survivor’s benefit, but under CIGNA’s Part A, eligible Tier 1 employees received the benefit without charge. A participant who wanted a larger portion to go to a surviving spouse (say, 50%) would pay a charge based only on the difference between the Free 30% and the percent requested (here, 20%).

CIGNA’s Part A did not offer a lump sum option. Participants could elect to receive their benefits in one of several different annuity options, but they could not receive their benefits in a lump sum. Under Part A, when an employee separated from CIGNA, their plan benefit re

*300

mained frozen and did not grow, because it was based on the employee’s earnings at CIGNA.

CIGNA’s Conversion to Cash Balance Plan. During 1996 and 1997, CIGNA, along with outside consultants such as the William Mercer Co. (“Mercer”), engaged in planning for a conversion of its defined benefit pension plan to a cash balance plan. In accordance with its conversion plan, in November 1997, CIGNA’s Chief Executive Officer (“CEO”) signed an amendment to CIGNA’s defined benefit pension plan freezing benefit accruals for all Tier 2 employees and for all Tier 1 employees with a combined age and years of service less than 45. The plan was that Tier 1 employees who had age and service credits of 45 or more would be grandfathered under the old Plan and thus continue to accrue benefits under Part A. All other employees would be moved to the new cash balance plan.

The November 1997 amendment provided in pertinent part as follows:

Notwithstanding any other provision of the Plan, no Employee who, as of December 31, 1997, is a New Formula Participant or has a combined total of Years of Credited Service and age less than forty-five (45) shall accrue any additional benefits under the Plan after December 31, 1997....

The foregoing cessation

and/or suspension in benefit accruals and exclusion from eligibility to participate in the Plan after December 31, 1997,

shall remain in effect until the adoption of a subsequent amendment to the Plan,

and such subsequent amendment may provide for benefit accruals under terms and conditions different from the Plan provisions in effect before 1998. No such subsequent amendment shall result in the accrued benefit of any Participant being less than such Participant’s accrued benefit under the plan as of December 31,1997.

Ex. 2 (Part A), at D00132 (Amendment No. 4) (emphasis added).

On December 21, 1998, CIGNA’s CEO signed the plan document for the cash balance plan, Part B, as well as an updated Part A plan document.

See

Ex. 501 (Part A), at D10440; Ex. 1 (Part B), at D00349. Even though the cash balance plan document was not signed until the end of 1998, the cash balance plan was made retroactive to January 1, 1998 so that Part B participants received retirement pay and interest credits for the entire year of 1998.

See

Ex. 519.

Non-grandfathered employees who were employed as of December 31, 1997 became participants in Part B. Additionally, any employees hired for the first time after January 1, 1998 automatically became participants in Part B upon their hire. These individuals are not part of the Class in this case; the Class includes only those Part B participants who previously were participants in Part A.

Part B provides that grandfathered participants in Part A who left CIGNA before December 31, 1997 and were rehired after adoption of Part B would become participants in Part B upon their rehire. As a result, those former employees who rejoined CIGNA between January 1, 1998 and December 21, 1998 (when Part B was signed) were placed into Part B. However, in a lawsuit filed by one such rehire, John Depenbrock, the United States Court of Appeals for the Third Circuit held that certain rehires should have remained in Part A, because the amendment creating Part B and establishing its rule applicable to rehires was not valid until signed by CIGNA’s CEO on December 21, 1998.

See Depenbrock v. Cigna Corp.,

389 F.3d 78, 82-83 (3d Cir.2004). As a result of the

Depenbrock

decision, other grandfathered Part A participants who were rehired between January 1, 1998 and December 21,

*301

1998 were notified in February 2005 that their benefits would be recalculated under Part A.

See

Ex. 539 (Letters from plan administrator regarding

Depenbrock

dated February 4, 2005). There are approximately 194 employees who fall into this group.

See

Ex. 173, at SuppD 15466.

Opening Balances. Non-grandfathered employees who were employed by CIGNA as of December 31, 1997 received a hypothetical opening account balance that was calculated by reference to their Part A accrued benefits. In particular, the opening account balance was calculated by taking the participant’s current annual benefit at normal retirement age (age 65) and computing the actuarial value of that benefit based on a 6.05% interest rate and by using the 1983 (unisex) Group Annuity Mortality Table (GATT). A lower 5.05% interest rate was applied to the accrued benefit at age 62 for Tier 2 participants who were active employees on December 31, 1997 and whose age and service totaled 55 or greater.

Thus, older or longer-serving employees received a more favorable opening balance calculation than similarly-situated younger or shorter-service employees. By design, therefore, for employees with identical service and compensation histories before 1998, the older employee would always receive a greater opening account balance than the similarly-situated younger employee.

The opening balance did not, however, include the full value of the subsidized early retirement benefit, the Social Security supplement, or the Preserved Spouse’s benefit. Also, the GATT mortality tables were used to discount the retirement benefit for pre-retirement mortality — that is, the likelihood that the participant would die between his or her current age and the normal retirement age of 65. Plaintiffs expert Claude Poulin explained that this pre-retirement mortality discount would be approximately 10% for a 30- or 40-year-old employee.

See

Trial Tr. 211:14-22. The discount was applied for purposes of determining employee opening balances, and therefore, as an employee grew older and the risk of pre-retirement mortality diminished, the employee would not recoup the amount of the discount taken in calculating the employee’s opening balance.

Benefit Credits. Part B participants also earn benefit credits that have both a pay and an interest component. These benefit credits are age-and service-favored — that is, Part B provides a higher credit rate to older or longer-serviee employees than similarly-situated younger or shorter-service employees. The benefit credits are also integrated with Social Security, meaning that Part B provides a higher credit on pay over the Social Security integration level, which is defined as one-half of the Social Security taxable wage limit each year (for example, $34,200 in 1998). Ex. 1 (Part B), at D00291; Ex. 10 (Sher Report), at 6.

*302

The following table shows Part B’s pay-credit rates:

Rate Applied to Pay Up to Rate Applied to Pay Over Age and Service Points_Integration Level_Integration Level

Under 35_3%_45%_

_35-44_4%_5J5%_

_45-54_5%_615%_

_55-64_6%_715%_

65 or More_7%8.5%

Therefore, an employee whose age is 40 with 10 years of service would have age and service points of 50. Assuming a Social Security integration level of $43,500 and further assuming that the employee earned $60,000 in a particular year, the employee would receive a pay credit of $8,247.50 (5% of $43,500 plus 6.5% of $16,500). If that same employee was 60 (thus having 70 age and service points), she would receive a pay credit in that same year of $4,447.50 (7% of $43,500 plus 8.5% of $16,500). As a consequence of the Part B design, for any two participants who have the same service and compensation history, the older one will receive a pay credit for any given year that is the same or higher than the younger employee.

Participants in Part B also receive interest credits quarterly on their hypothetical account balances at a floating rate that is subject to change at the beginning of each calendar year. The annualized interest rate is the yield on five-year U.S. Treasury securities in the preceding November plus 0.25%, subject to a minimum rate of 4.5% and a maximum of 9.0%.

See

Ex. 1 (Part B), at D00293 (§ 4.2(b)). Thus, Plan participants bear the risk of interest rate fluctuations, within the rate corridor provided by the Plan. Interest rate credits continue until the participant’s account is paid out as a lump sum or annuity payments begin. In any given year, all participants earn interest at the same rate; the interest rate credit is thus the same for all participants, regardless of age or length of service.

Under Part B, at retirement, or upon termination of employment, a participant could elect to receive benefits in the form of a lump sum. Alternatively, a participant could elect to receive benefits in one of several other forms available, including a single life annuity (stream of monthly payments payable for life) or a joint and survivor annuity (stream of monthly payments for life, with additional payments payable to a spouse for the life of the spouse).

See

Ex. 1 (Part B), at D00307-D00309 (§ 7.2).

Minimum Benefits and Wear Away. Under the terms of Part B, employees receive the greater of a retirement benefit based on their hypothetical account balances or their minimum benefit, as defined in the Plan. The Plan defined “minimum benefit” as, “in the case of a Participant who has a Part A Accrued Benefit which is converted into an Initial Retirement Account, the Participant’s Part A Accrued Benefit, expressed in the form of a single life annuity commencing at the Participant’s Normal Retirement Date,” “increased by the Equivalent Actuarial Value of the applicable Preserved Spouse’s Benefit.” Ex. 1 (Part B), at D00280 (§ 1.32). Part B also provided that these employees’ Part B accrued benefit, “expressed in the form of an immediate lump sum distribution, shall in no event be less than the present Equivalent Actuarial Value (determined using the Applicable Interest Rate and the Applicable Mortality Table) of the Participant’s Minimum Benefit.” Ex. 1

*303

(Part B), at D00720 (§ 1.1(c)). In effect, the minimum benefit was the participant’s age-65 annuity benefit under Part A, enhanced by the Free 30% spouse’s benefit if applicable. Section 7.3 of the Plan also protected the employee’s right to subsidized early retirement benefits to which they were entitled under Part A, provided those benefits were taken in the form of an annuity.

As a consequence of the manner in which opening balances were calculated under Part B, a participant’s opening account balance was not always equivalent to the value of the participant’s Part A accrued benefit. This is because the opening account balances were discounted to account for the risk of pre-retirement mortality and did not include the value of certain benefits, such as the Social Security supplement. As a result, an employee’s opening account balance could be much less than the employee’s Part A accrued benefit. Take Ms. Amara, for example. Under Part A, before Part B became effective, she had earned vested retirement benefits of $1,833.65 a month starting at age 55. Therefore, that was her Part A accrued benefit. However, her opening account balance under Part B was $91,124.88, which converts to an approximate age-55 annuity benefit of only $900, less than half her Part A accrued benefit.

See

Ex. 3 (Poulin Declaration), ¶¶ 25-26.

Interest rate fluctuations also affect the relationship between an employee’s minimum benefit and her account balance. Recall that within a rate corridor bounded by a minimum and a maximum, the employee bore the risk of interest rate fluctuations. Since the opening account balances were calculated by converting each participant’s annuity benefit into a lump sum using a particular interest rate (6.05% or 5.05%), if interest rates dropped, the employee’s minimum benefit could exceed the employee’s account balance. That is just what happened at CIGNA. With one exception, interest rates dropped each year after CIGNA converted to a cash balance plan, and that exacerbated the gap between employees’ opening account balances and their minimum benefits. The actual historical interest credit rates under Part B are as follows:

Year Interest Credit Rates

1998 6.05%

1999

2000 6.22%

2001 5.95%

2002 4.50%

2003 4.50%

2004 4.50%

2005 4.50%

2006 4.70%

Ex. 10; Ex. 587; Ex. 588. To illustrate this point, assume that an employee aged 40 had earned a $1,000 per month annuity before 1998. That annuity would be converted to an opening account balance of approximately $27,900 using a 6% interest rate, but when interest rates dropped to 4.5%, an account balance of $45,150 would be required to purchase that same $1,000 per month annuity.

See

Ex. 3 (Poulin Deck), ¶¶ 33-34; Ex. 4 (Supplemental Pou-lin Declaration), ¶¶ 12-14.

Thus, the design of Part B, plus the drop in interest rates, led to a phenomenon that is known as “wear away” for many, though by no means all, employees. Wear away means that there are periods of time in which the employee’s account balance is less than the employee’s minimum benefit. What wear away means in practice is that even though an employee is continuing each year to receive pay and interest credits under Part B, and the employee’s account balance may even be growing, it nonetheless remains less than the minimum benefit earned as of December 31, 1997; in effect, where there is wear away,

*304

even though the employee continues to work for CIGNA and continues to receive benefit credits, the employee’s expected retirement benefits have not grown beyond what the employee was entitled to under Part A as of December 31, 1997.

See, e.g.,

Ex. 40 (2002 memorandum from CIGNA’s Vice President for Employee Benefits), at D028635 (“Using the present value of normal retirement age benefits results in a significant ‘wear away’ period during which time employees accrue no additional benefits with future service.”).

And, as this ease illustrates, it may take years for some employees’ account balances to catch up to the minimum benefit to which the employees were entitled under Part A as of December 31,1997. Take Ms. Amara again. In her case, even though she was earning pay and interest credits every year, Plaintiffs expert Claude Poulin estimated that “it would take over 10 years for her cash balance account to exceed the value of her previously earned benefits.” Ex. 4 (Supp. Pou-lin Deck), ¶ 22;

see also

Ex. 3 (Poulin Decl.), ¶¶ 25-27; Ex. 32, at D028174, D028629.

Ms. Broderick and Ms. Glanz also experienced several years of wear away, as Defendants’ expert, Lawrence Sher, acknowledged.

See

Ex. 235. According to Plaintiffs’ expert, Patricia Flannery experienced nearly six years of wear away, from October 2000 to the present. At the end of 2005, her account balance converted to an annuity benefit of $756 per month, compared to the annuity of $813 per month she had earned with her service before 1998.

See

Ex. 7; Ex. 156. Plaintiff sought data showing the precise number of employees who actually experienced wear away, but Defendants assert that they do not maintain data that would provide that information. According to Plaintiffs’ expert, Mr. Poulin, “the overwhelming majority” of CIGNA’s employees experience wear away, with the exception of short-service employees and Tier 2 employees, like Barbara Hogan and Stephen Curlee, who had more than 55 age and service points and therefore benefited from the 5.05% interest rate used to calculate opening balances.

See

Trial Tr. 218:15 to 219:9; Trial Tr. 219:15 to 220:1; Ex. 4 (Supp. Poulin Deck), ¶ 28.

Defendants disagree regarding the precise amount of the wear away and the precise number of years for the catch-up period for any given employee; they also characterize that period differently from Plaintiffs. However, there is no doubt, and Defendants’ expert conceded this, that wear away is a real phenomenon, that is a consequence of the design of Part B, and that many CIGNA employees experienced it.

See, e.g.,

Ex. 27 (CIGNA’s answers to interrogatories No. 8 and 10); Ex. 241 (Hodges Deposition), at 93-103. Thus, both experts essentially agreed that the reasons for wear away were a combination of the following factors: (a) CIGNA’s selection of the “greater of A or B” approach rather than the “A plus B” approach; (b) the exclusion of early retirement subsidies from the opening balances; (c) the application of a pre-retirement mortality discount in determining opening balances; and (d) the effect of falling interest rates after 1997 on the annuities to which the accounts can be converted.

Moreover, as Defendants’ own expert acknowledged, wear away is a phenomenon that was well known and understood at the time of CIGNA’s adoption of a cash balance plan. Thus, in response to the Court’s questions, Mr. Sher admitted that wear away can be anticipated depending upon the design of the cash balance plan and the assumptions a company makes about interest rates:

The Court: Would it be typical to expect, for a decent sized portion of an

*305

emplojree population, that they might go as long as five or six years before they would actually cross and get into the positive on the conversion?

Mr. Sher: I think you have to, first we have to, look at each individual situation .... What are the causes of this phenomenon? ... I would characterize the early retirement as sort of a byproduct, ... that what we talked about is a natural thing for the early retirement to have that impact.

Trial Tr. 1008:17-21,1008:23 to 1009:10.

The Court: But going into a plan like this, would you expect there to be ... [a] reasonably significant portion of your employee population who could expect to not add to their minimum benefit for periods of between three and five years? Mr. Sher: I think it depends. I mean, the early retirement is one factor.... One approach is to do this grandfathering which is suggesting that CIGNA did it for a large group of people, not for everyone. So there are some people who are getting that early retirement, who could have that early retirement wearaway and that could last several years, the early retirement wearaway.

Trial Tr. 1009:23 to 1010:13.

The Court: In 1998, was it predictable and known to CIGNA, because of the various things we talked about — probably not with respect to interest rates so much but the early retirement subsidy sort of bringing that out and the prere-tirement mortality, in fact people’s opening balances ... would be lower than their minimum protected benefit?

Mr. Sher: I think certainly benefit projections, you know, could have been done to get at your question.... The problem is it’s hard to disregard [interest rate changes] but yes, absent that, yes.

The Court: Listen, we all have to predict things. Taking normal old regular old interest rate assumptions as you are standing in 1998, you still would have known that the opening balances for some sizeable group of employees, not obviously all, would be less than their protected benefit under the old plan? You would know that because you know mathematically that you are eliminating the early retirement subsidy.

Mr. Sher: Yes.

Trial Tr. 1029:21 to 1030:22.

The Court: [0]ne could ... have some prediction of whether there was going to be no wearaway; that the wearaway was minimal, you know, two months for most employees; or on average, depending upon where you fell in the spectrum, it could be two to three years. That would be some quantity that might prove to be wrong but would have been at least knowable at the time, right?

Mr. Sher: Yes, I think at least my experience, that’s often done....

Trial Tr. 1032:19 to 1033:2;

see

Trial Tr. 1019:7-11 (The Court: “So in designing these plans, would it be typical that you or the consultants in the company would try to make some estimates of wearaway for the employee population and then discuss potential mitigative solutions or not?” Mr. Sher: “Yes.”); Trial Tr. 1031:11-15 (Mr. Sher: “[PJeople do various kinds of analy-ses including projections using various assumptions as to what might happen in the future.... That’s how they design the transition provisions essentially, by looking at the potential impact....”).

The Court finds that wear away should have been anticipated by CIGNA, though the precise amount of wear away or duration for any given employee could not be predicted with accuracy. As discussed later, CIGNA was aware that its Plan could result in wear away, although there is no evidence in the record that CIGNA made any estimates of the preeise amount of

*306

wear away for its employee population.

See

Ex. 81 (Mercer materials, which do not include any calculations of wear away).

CIGNA Announces and Describes Conversion to Employees. In early November 1997, about a year before CIG-NA’s CEO signed the plan documents for Part B, CIGNA sent a special edition “Signature Benefits Newsletter” (the “1997 Newsletter”) to all employees. Ex. 8, Tab 1; Ex 516.

It was entitled “Introducing Your New Retirement Program,” and it described not only the conversion to the cash balance plan, but also enhancements to CIGNA’s Savings and Investment Plus (“SIP”), the 401(k) defined contribution plan.

The 1997 Newsletter informed employees that a new retirement program was going to be introduced effective January 1, 1998:

On January 1, 1998, CIGNA will introduce a new retirement program. The program includes the new CIGNA Retirement Plan, which replaces the current CIGNA Pension Plan for most employees, plus an enhanced version of Savings and Investment Plus (SIP), our 401(k) plan. Most CIGNA employees will participate in the new CIGNA Retirement Plan, although some long-service employees will remain in the current Pension Plan.... If you are moving to the new Retirement Plan, you will continue to earn benefits under the Pension Plan through December 31, 1997, and then transfer to the CIGNA Retirement Plan beginning in 1998.

Ex. 516, at D00607 (emphasis omitted). The 1997 Newsletter stated that employees participating in the new plan would “stop earning benefits under the current Pension Plan on December 31, 1997.”

Id.

at D00611. It also informed employees that additional information would be forthcoming in December 1997.

In an inset box on the 1997 Newsletter’s cover, a “Message from CEO Bill Taylor” states: “I am pleased to announce that, on January 1, 1998, CIGNA will significantly enhance its retirement program.... These enhancements will make our retirement program highly competitive.... ”

Id.

at D00607. The 1997 Newsletter tells employees that “the new plan is designed to work well for

both

longer-and shorter-service employees,” it provides “steadier benefit growth throughout [the employee’s] career,” and it “build[s] benefits faster” than the old plan.

Id.

at D00610. On the same page, the 1997 Newsletter tells employees that “[o]ne advantage the company

will not

get from the retirement program changes is cost savings.”

Id.

However, an internal expense projection prepared at the time showed that CIGNA anticipated a reduced cost of approximately $10 million by virtue of the conversion from a traditional defined benefit plan to a cash balance plan, though it also expected to incur an additional cost of approximately $10 million by virtue of upgrades to its SIP or 401(k) plan.

See

Ex. 739. The 1997 Newsletter did not discuss or even mention the phenomenon of wear away.

The 1997 Newsletter described how employees would receive an opening account balance and benefit credits:

The new CIGNA Retirement Plan is an account balance plan — a type of retirement plan that is becoming increasingly popular as a simpler alternative to traditional pension plans. Here’s how the new plan will work:

• If you are transferring from the current Pension Plan to the new plan, an

*307

account will be set

up for you in

January.

• If you earned a benefit under the current Pension Plan, the lump sum value of that benefit as of December 31, 1997, will be transferred to your account as your opening balance.

• Beginning in January, your Retirement Plan account will grow through two types of credits:

— Benefit credits. CIGNA will make a benefit credit to your account for each year in which you work at least 1,000 hours for the company. These credits will range from

to 8.5% of your eligible annual earnings, depending on your age, service and earnings.

— Interest Credits. CIGNA will also credit your account with interest each quarter until you receive your benefit from the plan. The annual interest rate will vary from 4.5% to 9%, depending on recent yields of 5-year Treasury Bonds. This interest rate is consistent with guidelines set by the IRS for account balance retirement plans.

Ex. 516, at D00608 (emphasis omitted). The 1997 Newsletter informed employees that information concerning their account balances was forthcoming:

CIGNA will begin the process of calculating final pension benefits and Retirement Plan opening balances early in 1998, after all 1997 payroll data are finalized. Benefit calculations are expected to be completed in the spring. Once balances are calculated, they will be credited to Retirement Plan accounts retroactively to January 1, 1998, so you won’t lose any interest credits for the first part of 1998. You will be informed of your final Pension Plan benefit and Retirement Plan opening balance in your Total Compensation Report, scheduled to be mailed in May 1998.

Id.

at D00611 (emphasis omitted).

The 1997 Newsletter also told employees about their options upon leaving CIGNA:

When you retire or leave CIGNA, you will have the option to receive your vested account balance in one of two ways. You may choose an annuity (monthly payments for life), or you may take your account balance as a single lump sum payment. The lump sum option is new and resembles the SIP payment option. If you prefer, you may roll over your lump sum payment into an individual retirement account (IRA) or your new employer’s qualified retirement plan. This provision allows you to assume investment control over your benefit — and defer income taxes on it — until you are ready to use it. You will also have the option to leave your account balance in the Retirement Plan, where it will continue to earn interest credits until you elect to receive your benefit.

Id.

at D00608.

In December 1997, CIGNA sent each participant a Retirement Program Information Kit (“Retirement Kit”). Ex. 508. There were four different versions of the Retirement Kit, depending upon whether the participant was being converted to Part B or grandfathered in Part A and whether he or she participated in CIGNA’s supplemental pension plan. Again, the Retirement Kit, like the 1997 Newsletter, explains that the changes were being made to “improve the competitiveness of our benefits program and thus our ability to attract and retain top talent.” Ex. 508, at D00724 (emphasis omitted). The Kit states that the changes are “enhancements to the plans,” and that CIGNA is not saving any money with the changes, “nor has the new program been designed to save money.”

Id.

at D00724-D00725.

*308

The Retirement Kit explained that non-grandfathered employees would cease accruing benefits under Part A as of December 31, 1997, and would automatically become a participant in Part B “on January 1, 1998.”

Id.

at D00726, D00718. The Retirement Kit provided greater detail than the Newsletter regarding pay and interest credits, which would be added to employees’ hypothetical accounts on a quarterly basis, and payment options. It also told employees that they would receive periodic account statements called “Total Compensation Reports” so they could “keep track of [their] account growth.”

Id.

at D00745.

The Retirement Kit also contained detailed information about the calculation of opening balances. However, it did not state that a pre-mortality discount would be applied in calculating the opening balances. CIGNA informed employees as follows:

Step 2: Converting Your Final Pension Benefit to an Opening Balance Your normal pension benefit is an annual payment made to you for life, beginning when you turn age 65. To convert that annual pension benefit into an opening balance for the new plan, a calculation has to be made to determine how much that future stream of payments is worth today. This type of calculation is called a present value calculation.

The method used to calculate the present value of a pension benefit is established by law. Basically, the present value of your pension benefit equals the amount of money that someone would need to invest now to have enough money in the future to pay your annual pension benefit. This calculation is made assuming that the “invested” money would earn a moderate rate of interest (about 6.5% per year). Because of the relatively low interest rate, the amount available to you today is relatively large. In fact, to increase your opening balance, CIGNA has selected a much lower interest rate than the 7% or 8% rate adopted by most companies making similar pension plan changes. Your current age affects the present value of your pension benefit, because the closer you are to retirement age, the less time there is for the lump sum balance to grow, and therefore the more money you need to invest now. Because of this, two people who have earned the same pension benefit at age 65 will have different opening account balances if their ages are different. The older person will have the larger opening balance because there is less time for that person’s account balance to grow.

Table 1 shows the factors that will be used to convert final annual pension benefits to opening balances....

Special Conversion Formula for Older, Longer-service Employees

If your age and credited service with CIGNA total 55 or more on January 1, 1998, two special procedures will be used in calculating your opening account balance:

• First, your opening balance will be based on the present value of your age 62 early retirement benefit, rather than on the present value of your age 65 normal retirement benefit. The age 62 benefit has a higher present value than the age 65 benefit.

• Second, a lower interest rate will be used in making the present value calculation (one percentage point less than the standard rule — for instance, 5.5% if the standard rate is 6.5%). The lower interest rate increases the size of your opening balance.

These special procedures have been adopted because most employees in this age and service category will have fewer years to accumulate benefits under the new Retirement Plan. CIGNA wants to

*309

ensure that these older, longer-service employees receive fair and adequate benefits at retirement.

Id.

at D00719-D00721 (footnote omitted).

Under a heading captioned “How Your Benefit Grows,” the Retirement Kit states that “[e]ach dollar’s worth of credits is a dollar of retirement benefits payable to you after you are vested.”

Id.

at D00740. It also contains examples of how a hypothetical employee’s account would grow. The Retirement Kit includes this question: “Will my benefit be better under the new Retirement Plan?” The answer was as follows:

The new Retirement Plan is different from the current Pension Plan, so exact comparisons of benefits that cover all possible outcomes are difficult.

Generally speaking, the new Retirement Plan, in comparison with the current Pension Plan, tends to provide larger benefits for shorter-service employees and comparable benefits for longer-service employees.

... Of course, other features of the new plan add to your benefit value as well. The lump sum distribution option can be very valuable, since it will allow you to move your benefits into other tax-deferred investments after you retire or leave CIGNA. Also, because the Retirement-Plan works like a savings plan, with contributions credited to an account, you should find it easier to understand. You now have two plans that are account-based, enabling you to track your retirement benefits by looking at your statements. As

a result, you will see the growth in your total retirement benefits from CIGNA every year and will be able to update your financial plans accordingly.

Id.

at D00729 (emphasis added);

see also

Exs. 509-12.

This Lawsuit. This lawsuit was filed in 2001 by Ms. Amara and others. Judge Dominic Squatrito, who previously presided over this case, certified it as a class action on December 20, 2002,

see

Mem. of Decision [doc. # 61], and additional named Plaintiffs were added on February 15, 2006.

See

Order [doc. # 164]. On March 12, 2007, this Court issued an order complying with the requirements of new Rule 23(c)(1)(B) [doc #241], and that Order specifies the class, sub-class, and individual claims and defenses. The following diseussion seeks to address the class and subclass issues.

II. Threshold Procedural Issues

Before turning to the parties’ substantive arguments, the Court will address two threshold procedural issues raised by CIG-NA: The first is whether Plaintiffs’ claims are time-barred; the second is whether the named Plaintiffs and thousands of other Class members waived the claims asserted in this case. Neither argument has merit.

A. Statute of Limitations. Plaintiffs brought this lawsuit under section 502 of ERISA, 29 U.S.C. § 1132 , which does not contain a limitations period. Where Congress fails to provide a statute of limitations, federal courts apply the statute of limitations that governs the most closely analogous state cause of action.

See Sandberg v. KPMG Peat Marwick, LLP,

111 F.3d 331, 333 (2d Cir.1997);

Miles v. N.Y. State Teamsters Conference,

698 F.2d 593 , 598 (2d Cir.1983);

Chisholm v. United of Omaha Life Ins. Co.,

514 F.Supp.2d 318, 324 (D.Conn.2007). The question in this case is which state cause of action is most closely analogous to ERISA. Plaintiffs argue for Connecticut’s six-year statute of limitations for written contracts, Conn. Gen.Stat. § 52-576; CIGNA, on the other hand, contends that Connecticut’s 180-day statute of limitations for age discrimination claims, Conn. Gen.Stat. § 46a-82, or its two-year statute of limitations for actions to collect wages or fringe benefits, Conn. GemStat. § 52-596, is more appropriate.

Every decision of the Second Circuit that the Court has found holds that the most closely analogous state statute of limitations for employee benefit claims similar to Plaintiffs’ is that for written contracts.

*312

Courts have generally reasoned, and this Court now adopts that reasoning, that even when the claim is that a company’s plan does not comply with ERISA’s statutory requirements, the focus is on the adequacy and legality of the plan itself, which is a written contract between employers and their employees. In

Miles,

for example, the Second Circuit held that because employee benefit plans are contracts, New York’s six-year statute of limitations for causes of action in contract applied to claims under ERISA to determine the employee’s eligibility for pension benefits.

See

698 F.2d at 598;

see also Campanella v. Mason Tenders’ Dist. Council Pension Plan,

299 F.Supp.2d 274, 280 (S.D.N.Y. 2004),

aff'd

132 Fed.Appx. 855 (2d Cir. 2005) (applying six-year statute of limitations for claims of statutory violations under ERISA);

Carey v. Int’l Bhd. of Elec. Workers,

201 F.3d 44, 49 (2d Cir.1999) (“[W]e affirm the judgment of the District Court that Carey’s ERISA claim is barred by the six-year statute of limitation.”).

District courts in the Second Circuit have also uniformly held that New York’s and Connecticut’s statutes of limitations for written contracts govern actions under ERISA.

See, e.g., Cole v. Travelers Ins. Co.,

208 F.Supp.2d 248, 252 (D.Conn.2002) (applying Connecticut’s six-year statute of limitations for contract actions);

Venturini v. Metro. Life Ins. Co.,

55 F.Supp.2d 119, 120 (D.Conn.1999) (same);

Manginaro v. Welfare Fund of Local 771, I. A. T.S.E.,

21 F.Supp.2d 284, 293 (S.D.N.Y.1998) (applying New York law).

Indeed, colleagues in this District have expressly rejected both Connecticut’s 180-day statute of limitations for age discrimination claims and its two-year statute of limitations for actions to collect on unpaid wages in favor of the six-year limit for written contracts.

See Parsons v. AT&T Pension Benefit Plan,

No. 3:06cv552 (JCH), 2006 WL 3826694 , at *2 (D.Conn. Dec. 26, 2006) (“Contrary to

Sandberg ,

which involved no claims related to specific benefits, this case deals with determining specific benefits, and thus is about a contract. Hence, the court finds that the most analogous state statute of limitations is six years, for breach of contract claims[, not 180 days, for age discrimination claims].”). As the court explained in

Christensen v. Chesebrough-Pond’s, Inc.,

No. 5-92-cv-727(AHN), 1993 U.S. Dist. LEXIS 21278 (D.Conn. Nov. 24,1993)

[T]his court remains unpersuaded that it should depart from the considerable weight of authority which holds that ERISA actions to recover unpaid employee welfare benefits should be governed by state statutes of limitations governing contract actions. In addition, this result is consonant with the remedial nature of ERISA, and the liberal construction traditionally given to the Act, a conclusion that other circuits apparently share.

Id.

at *16 (citation and quotation marks omitted). This Court agrees.

Finally, several district courts that have recently considered claims similar to Plaintiffs’ regarding the conversion of a

*313

traditional defined benefit plan to a cash balance plan have held that the six-year statute of limitations period for written contracts applies to such claims.

See Hirt v. Equitable Ret. Plan,

450 F.Supp.2d 331, 333-34 (S.D.N.Y.2006) (applying New York law);

In re Citigroup Pension Plan ERISA Litig.,

470 F.Supp.2d 323 , 336-37

n. 70 (S.D.N.Y.2006) (“Defendants argue that the Court should apply a three-year statute of limitations. In arguing for a three-year time limit [rather than New York’s six-year limit for written contracts], defendants ignore — without attempting to distinguish — many Second Circuit decisions.”) (citation omitted);

In re J.P. Morgan Chase Cash Balance Litig.,

460 F.Supp.2d 479, 483 (S.D.N.Y.2006) (“Employee benefit plans are contracts, accordingly, under New York law, the applicable statute of limitations is six years.”).

Not only does CIGNA fail to distinguish any of this case law, it also does not cite even a single case in which a court in this Circuit has applied the shorter statutes of limitations that CIGNA urges upon the Court. Simply asserting that the reasoning in

Parsons

is “unpersuasive,” Defendants’ Post-Trial Brief [doc. # 251], at 31 n. 23, is insufficient. The only case CIG-NA cites for support is

Syed v. Hercules Inc.,

214 F.3d 155 (3d Cir.2000), in which the Third Circuit considered which statute of limitations to apply to Mr. Syed’s claim for benefits under § 502a(l)(B) of ERISA. At the outset of its analysis, the court noted, “Although this Circuit has not decided which state statute of limitations is applicable to ERISA § 502(a)(1)(B),

every other circuit

to address the issue has applied the statute of limitations for a state contract action.” 214 F.3d at 159 (emphasis added) (collecting cases). The Third Circuit chose to apply a contract statute of limitations as well, but Delaware law had two such statutes of limitations. Thus, although the Third Circuit eventually settled on the shorter statute of limitations under the more specific contract provision covering employment disputes, the court nevertheless accepted the premise that a contract statute of limitations is the most closely analogous state statute of limitations. The court also went on to add that it was “inclined to agree with the dissent that the one-year limitations period of § 8111 is not optimal.” 214 F.3d at 161 . Given the overwhelming weight of authority in the Second Circuit for applying Connecticut’s six-year contract statute of limitations, the Court rejects CIGNA’s argument for a shorter limit and concludes that Plaintiffs’ claims are timely.

B. Waivers. Several of the named Plaintiffs and many Class members signed written waivers of claims in order to receive severance benefits.

The signed waivers defined the released claims as follows:

“Claims” are any and all claims, demands and causes of action of whatever kind, including any claim for attorney’s fees, that you now have, or at any time had, against any Released Persons, but only to the extent they arise out of or relate in any way to your employment or

*314

termination of employment with the Company and its affiliates.

Ex. 525, ¶ 5(e). Importantly, the waivers included an exception for “any claims for benefits under any retirement, savings, or other employee benefit programs.”

Id.

¶ 5(f). CIGNA contends that the exception “only applies to claims for

benefits

under the Plan, not claims alleging statutory ERISA violations,” and that Plaintiffs’ claims of statutory violations are barred by the release language of the waivers. Defs.’ Post-Trial Brief [doc. # 251], at 121. The Court disagrees.

The Court acknowledges at the outset that employees can release claims of statutory ERISA violations in return for severance benefits. “In

Lockheed Corp. v. Spink,

517 U.S. 882, 894 , 116 S.Ct. 1783 , 135 L.Ed.2d 153 (1996), the Supreme Court sanctioned the use of early retirement incentives conditioned upon the release of claims and found that conditioning additional benefits on the voluntary waiver of claims against an employer was not prohibited by section 406(a)(1)(D) of ERISA.”

De Pace v. Matsushita Elec. Corp. of Am.,

257 F.Supp.2d 543, 555 (E.D.N.Y.2003) (citation and quotation marks omitted);

see also Smart v. Gillette Co. Long-Term Disability Plan,

887 F.Supp. 383, 385 (D.Mass.1995) (“Both parties agree that the conditioning of severance benefits on an agreement to waive an ERISA claim is not prohibited by the statute.”). Nor need a release expressly mention ERISA in order for a court to conclude that ERISA claims were waived.

See, e.g., Chaplin v. NationsCredit Corp.,

307 F.3d 368, 373 (5th Cir.2002) (“Finally, plaintiffs cite no section of ERISA or any caselaw to suggest, much less to require, that, to cover an ERISA claim, a release must specifically mention ERISA.”).

However, courts have also uniformly held that the party relying on the waiver bears the burden of proving that the waiver was “an intentional relinquishment or abandonment of a known right or privilege.”

Smart,

887 F.Supp. at 385 (quotation marks omitted);

see also

26 U.S.C. § 411 (b)(l)(H)(i) (similar Internal Revenue Code provision). The statutory provisions do not define “benefit accrual,” “rate of ... benefit accrual” or “because of the attainment of any age.” The Treasury Department proposed regulations to define those terms, but withdrew its proposals in the expectation of congressional amendments, which were not enacted at the time CIGNA adopted its cash balance plan.

That legislative and administrative vacuum has led to considerable litigation in the courts over the meaning of those phrases.

In brief, CIGNA — through its expert Lawrence Sher — contends that so long as the rate at which employees accrue interest and pay credits does not discriminate on the basis of age, the Plan does not violate the prohibitions on age discrimination. As Mr. Sher points out, under CIG-NA’s Plan, older and longer-serving employees accrue pay credits at the same or higher rates than younger or shorter-serving employees. This is because pay credits in the CIGNA Plan are age-and service-favored; interest rate credits are the same regardless of age or service. Furthermore, the calculation of opening balances favored older employees by using a more favorable conversion rate for participants whose age and service totaled 55 or greater.

Plaintiffs, on the other hand, contend that in determining the “rate of benefit accrual,” courts must focus not on the annual accruals — or inputs — but rather on the benefits that are payable upon normal retirement — the outputs. Through their expert Claude Poulin, Plaintiffs assert that a younger worker who has the same service record and same compensation as a similarly-situated older worker will at normal retirement receive a greater annuity than the similarly-situated older worker. This is because the younger worker has more years to normal retirement and therefore more years to accumulate benefit credits and reap the financial advantages of the phenomenon of compound interest.

Since this litigation was filed, numerous courts have addressed the precise issue presented in this case. Two divergent positions have emerged. At the risk of oversimplification, one school of thought — exemplified by a decision of the Court’s colleague Judge Janet C. Hall — concludes, after an assessment of the statutory text and legislative history, that the phrase “rate of benefit accrual” in the age discrimination provision should be equated with the term “accrued benefit,” which is defined in ERISA and means the annual benefit commencing at normal retirement age.

See Richards v. FleetBoston Fin. Corp.,

427 F.Supp.2d 150, 157-62 (D.Conn. 2006). According to this line of reasoning, since younger employees will receive an annual benefit payable at normal retirement age greater than the benefit that an older, similarly-situated worker would receive, cash balance plans (or at least plans like CIGNA’s) violate the age discrimination prohibitions. Other courts have embraced Judge Hall’s analysis.

See, e.g., In re Citigroup,

470 F.Supp.2d 323 ;

In re J.P. Morgan Chase,

460 F.Supp.2d 479 .

*318

Judge Frank Easterbrook of the Seventh Circuit took a contrary view in

Cooper v. IBM Personal Pension Plan,

457 F.3d 636 (7th Cir.2006).

Cooper

held that when Congress used the phrases “rate of benefit accrual” and “accrued benefit” in ERISA, Congress meant different things; otherwise, according to ordinary canons of construction, Congress would not have used different phrases. According to

Cooper ,

“rate of benefit accrual” refers to the rate of the employer’s contributions to the plan (which in CIGNA’s case is always greater for older employees than younger, similarly-situated employees), rather than to the increase due to compounding interest in a participant’s accrued normal retirement benefit. As Judge Easterbrook put it, Plaintiffs’ argument “treats the time value of money as age discrimination ... [and][t]reating the time value of money as a form of discrimination is not sensible.”

Id.

at 638-39 . Furthermore, Judge East-erbrook explains, Plaintiffs’ approach adds to the younger and older workers’ accounts all of the interest earned until age 65, but then neglects to discount that resulting sum to present value for purposes of comparison. When an appropriate discount rate is used, the apparent excess earned by the younger worker (through the magic of compound interest) disappears.

The two circuit courts to address this issue since

Cooper

have agreed with Judge Easterbrook and found cash balance plans not to be age discriminatory.

See Drutis v. Rand McNally & Co.,

499 F.3d 608 (6th Cir.2007);

477 F.3d 56 (3d Cir.2007). Many other district courts have also embraced

Cooper’s

reasoning.

See, e.g., Custer v. S. New Eng. Tel. Co.,

No. 3:05cv1444 (SRU), 2008 WL 222558 (D.Conn. Jan. 25, 2008);

Tomlinson v. El Paso Corp.,

No. 04-cv-02686-WDM-MEH, 2007 WL 891378 (D.Colo. Mar. 22, 2007);

Sunder v. U.S. Bank Pension Plan,

No. 4.-05CV01153 ERW, 2007 WL 541595 (E.D.Mo. Feb. 16, 2007);

Finley v. Dun & Bradstreet Corp.,

471 F.Supp.2d 485 (D.N.J.2007);

Tootle v. ARINC, Inc.,

222 F.R.D. 88 (D.Md.2004);

Eaton v. Onan Corp.,

117 F.Supp.2d 812 (S.D.Ind.2000).

The Second Circuit has not yet had the opportunity to consider this issue. However, that court currently has before it two cases that will afford the circuit an opportunity to decide the question presented by this case. In

Hirt,

441 F.Supp.2d 516 ,

appeal docketed,

No. 06-4757cv (2d Cm. Oct. 13, 2006), District Judge Alvin Heller-stein held that PNC’s cash balance plan was not age discriminatory. Similarly, in

Bryerton v. Verizon Communications Inc.,

No. 06 Civ. 6672(DC), 2007 WL 1120290 (S.D.N.Y. Apr. 17, 2007),

appeal docketed,

No. 07-1680cv (2d Cir. Apr. 23, 2007), Judge Denny Chin followed

Hirt. Accord Custer,

2008 WL 222558 ;

Laurent v. PriceWaterhouseCoopers LLP,

448 F.Supp.2d 537 (S.D.N.Y.2006).

Hirt

and

Bryertin

have been briefed but not yet argued before the Second Circuit.

Given the fact that

Hirt

and

Bryertin

are before the Second Circuit and that the courts that have considered this issue have already thoroughly discussed the arguments on each side of the question, the Court will not repeat those arguments at length in this decision. Counsel for both parties agreed that there were no material differences between CIGNA’s Plan and the plans that were considered in the previously cited decisions. Suffice it to say that after careful consideration, this Court adopts the position of the Third, Sixth, and Seventh Circuits, as well as that of the district courts in

Hirt

and

Bryertin.

In this Court’s view, CIGNA’s cash balance plan is not age discriminatory. To the contrary, the CIGNA Plan provides greater annual benefits to older workers who are similarly situated to younger

*319

workers. Thus, this Court agrees with Judge Chin, who recently summarized the reasons why a cash balance plan like CIG-NA’s is not age discriminatory:

First, the terms of the Plan are not only age neutral, but actually provide pay credits at a rate that is more generous for older employees than for younger employees. Interest credits are calculated at an identical rate for all employees. Thus, the fact that a younger employee’s pay credits are eventually worth more than those paid to an older employee (with a comparable salary and similar number of years of service) results not from discrimination, but from the fact that the younger employee has had more time to accumulate interest (as it will take more years for the younger employee to reach age 65). In other words, the discrepancy results from the time value of money.

As the

Cooper

court explained, “[n]oth-ing in the language or background of § 204(b)(l)(H)(i) suggests that Congress set out to legislate against the fact that younger workers have (statistically) more time left before retirement, and thus a greater opportunity to earn interest on each year’s retirement savings. Treating the time value of money as a form of discrimination is not sensible.” Second, plaintiffs’ position is based on their repeated assertion that “benefit accrual” and “accrued benefit” are equivalent. There is, however, simply no indication that Congress meant for the two terms to be used interchangeably. Congress easily could have used the same terminology, but it did not. Indeed, I agree with Judge Easter-brook’s interpretation that the phrase “benefit accrual” in § 204(b)(l)(H)(i) “reads most naturally as a reference to what the employer puts in ... while the defined phrase ‘accrued benefit’ refers to outputs after compounding.” Third, a comparison of the parallel anti-discrimination provisions for defined benefit and defined contribution plans reinforces this reading of the text. According to § 204(b)(2)(A), “[a] defined contribution plan satisfies the requirements of this paragraph if, under the plan, allocations to the employee’s account are not ceased, and the rate at which amounts are allocated to the employee’s account is not reduced, because of the attainment of any age.” This provision is nearly identical with the anti-discrimination provision for defined benefit plans, with the exception that the provision for defined benefit plans states what is prohibited, while the provision for defined contribution plans states what works.... [I]t would make little sense for Congress to allow for the accumulation of interest for defined contribution plans, but prohibit it for defined benefit plans.

Bryertin,

2007 WL 1120290 , at *4-5 (citations omitted).

Furthermore, as Judge Easterbrook pointed out in

Cooper

and as Plaintiffs’ expert Mr. Poulin acknowledged,

see

Trial Tr. 266-67, when one discounts the younger worker’s benefits to present value, any difference between the older worker and younger worker’s annuity disappears. That is, one cannot compare what an older worker will receive as an annuity in 2015 to the annuity that a younger worker will receive in 2080. Not surprisingly, those figures will always be different and the younger worker’s annuity will always look greater. That is what Mr. Poulin did in his report. But that differential is because of interest, not age discrimination. As Mr. Sher properly explains,

see

Ex. 10 (Sher Report), at 17; Trial Tr. 1147-49, to make any meaningful comparison, one needs to discount the younger worker’s annuity to 2015 (or inflate the older worker’s to 2030) and when that is done, the differential caused by compound interest disappears.

*320

One final argument bears mention. In addition to what might be called the traditional age discrimination argument, Plaintiffs claim that CIGNA’s Plan discriminates against older employees because, they say, wear away affects older employees more than younger employees — older participants have longer wear away periods under the CIGNA Plan according to Plaintiffs. If that were true, Plaintiffs might well have a good age discrimination claim. But the Court finds that there is simply no evidence to support Plaintiffs’ assertion, and much of the evidence refutes it.

Plaintiffs rely heavily upon the fact that wear away is affected by the elimination of subsidized early retirement benefits in calculating the opening balance and that early retirement eligibility is a function of age. But as the experts testified, wear away results from a variety of factors, and in this case it was principally driven by the fall in interest rates, which affects all employees equally.

See Custer,

2008 WL 222558 , at *10 (“The ‘wear-away’ period is not necessarily longer for older workers; it is longer for workers that have greater frozen benefits. Under the old plan, the size of a worker’s frozen benefits is a function of a worker’s salary and years of service, not his age.”). Furthermore, Plaintiffs’ expert acknowledged that the mortality discount used in calculating the minimum benefit always is greater for younger participants than for similarly-situated older participants. Indeed, Plaintiffs expert conceded that he had never actually analyzed the lengths of wear away periods for older and younger participants, or even the demographics of the participants in the Plan, though in his defense Plaintiffs complain that CIGNA failed to produce during discovery the data necessary to conduct such an analysis.

However, if CIGNA’s Plan did structurally disfavor older employees in terms of wear away, the Court does not understand why Mr. Poulin could not have shown it; he seemed to have little difficulty seeking to show other alleged adverse impacts from the structure of the CIGNA Plan.

Finally and importantly, the Court agrees with CIGNA that what Plaintiffs see as age discrimination is merely the transition from one plan that was heavily age-favored to another plan that is still age-favored but less so. In the Court’s view, that transition is not age discrimination.

See Cooper,

457 F.3d at 642 (“But removing a feature that gave extra benefits to the old differs from discriminating against them. Replacing a plan that discriminates against the young with one that is age-neutral does not discriminate against the old.”).

IV. Anti-Backloading and Non-Forfeiture Rules

A. Anti-Backloading Rules. Section 204 of ERISA addresses “back-loading,” or the practice by which employers seek to postpone the crediting of the bulk of retirement benefits to their employees’ pensions until late in the employees’ careers.

See

29 U.S.C. § 1054 (a)-(b)(1). Backloading does not merely postpone the time at which employers must make contributions to the employees’ accounts; it also benefits the employer because only employees who remain at the

*321

company until retirement reap relatively large retirement benefits. As the Second Circuit explained in

Langman v. Laub,

328 F.3d 68 (2d Cir.2003), “ ‘The primary purpose of [minimum accrual rates] is to prevent attempts to defeat the objectives of the minimum vesting provisions by providing undue ‘backloading,’ i.e., by providing inordinately low rates of accrual in the employee’s early years of service when he is most likely to leave the firm and by concentrating the accrual of benefits in the employee’s later years of service when he is most likely to remain with the firm until retirement.’ ”

Id.

at 71 (alteration in original) (quoting H.R.Rep. No. 93-807 (1974)).

The anti-backloading provisions of ERISA require employers to satisfy one of three possible tests, all aimed at ensuring a steady accumulation of retirement benefits over the course of an employee’s career. The parties agree that the applicable test in this case is the so-called 133-1/3% rule, rather than the 3% rule or the fractional accrual rule, because benefits under CIGNA’s cash balance plan are calculated using a career pay history.

See

29 U.S.C. § 1054 (b)(1). The other two rules apply to plans that, unlike the CIG-NA Plan, base their benefit calculations

final or highest average pay.

See

29 U.S.C. § 1054 (b)(1)(A), (C).

It is apparent from the statutory text that the 133-1/3% rule is prospective, in that an employer must demonstrate each year that the plan will comply with the rule in all future years; benefit accruals in previous years are not taken into consideration.

See

IRS Revenue Ruling 2008-7. A defined benefit plan satisfies the requirements of the 133-1/3% rule if under the plan

the accrued benefit payable at the normal retirement age is equal to the normal retirement benefit and the annual rate at which any individual who is or could be a participant can accrue the retirement benefits payable at normal retirement age under the plan for any later plan year is not more than 133 1/3 percent of the annual rate at which he can accrue benefits for any plan year beginning on or after such particular plan year and before such later plan year.

29 U.S.C. § 1054 (b)(1)(B);

see also

26 C.F.R. § 1.411 (b)l(b)(2). Thus, the rate of benefit accrual in any given year may not exceed the rate of benefit accrual in any prior year by more than 133-1/3 %. The corollary of this requirement is that each year’s accrual must be no less than 75% of any later year’s accrual.

There are important limitations or restrictions in making the calculations required to demonstrate compliance with the rule. For one, the 133-1/3% rule is to be examined without consideration of any pri- or formulas or prior plans. Thus, the rule provides that “any amendment to the plan which is in effect for the current year shall be treated as in effect for all other plan years.” 29 U.S.C. § 1054 (b)(l)(B)(i). Furthermore, “the fact that benefits under the plan may be payable to certain employees before normal retirement age shall be disregarded.” 29 U.S.C. § 1054 (b)(1)(B)(iii). In light of this provision, Plaintiffs conceded at oral argument that wear away due solely to the exclusion of early retirement benefits from the protected minimum benefit should not be considered in determining compliance with the 133-1/3% rule. In addition to the exclusion of early retirement benefits from the calculations under the 133-1/3% rule, ERISA also provides that “social security benefits and

all other relevant factors

used to compute benefits shall be treated as remaining constant as of the current year for all years after the current year.” 29 U.S.C. § 1054 (b)(l)(B)(iv) (emphasis added). These factors include the applicable consumer price index, for example.

See

26 C.F.R. § 1.411 (b) — 1(b)(2)(D).

*322

Plaintiffs make two arguments under the 133-1/3% rule. Their principal argument is that Part B violates the rule because there are no benefit accruals during wear away periods, as benefits under Part B will not be paid to an employee with a protected minimum benefit under Part A unless and until the employee’s cash balance account exceeds the protected minimum benefit. The second claim does not rely on the phenomenon of wear away; rather, Plaintiffs argue that Part B violates the 133-1/3% rule structurally because of the use of variable interest rates. Neither of these arguments is persuasive.

Regarding wear away, the evidence showed that there were many CIGNA employees who experienced this phenomenon, including named Class representatives. During the wear away period, Plaintiffs argue, the rate of benefit accrual is zero. Thus, any later accrual, once the cash balance account exceeds the protected minimum benefit, must necessarily be more than 133-1/3% of the (non-existent) accrual during wear away. CIGNA points out that Plaintiffs’ argument is dependent upon comparing the minimum vested benefit under CIGNA’s prior plan with the accrued benefits under CIGNA’s new plan, and argues that such a comparison between the two plans is not permissible under 29 U.S.C. § 1054 (b)(l)(B)(i). In response, Plaintiffs invoke the so-called “aggregation rule,” under which

[a] defined benefit plan may provide that accrued benefits for participants are determined under more than one plan formula. In such a case, the accrued benefits under all such formulas must be aggregated in order to determine whether or not the accrued benefits under the plan for participants satisfy one of the alternative methods [i.e., one of the three anti-backloading tests].

26 C.F.R. § 1.411 (b) — 1 (a). Plaintiffs assert that the aggregation rule should apply to Part B because “more than one plan formula” is involved in calculating the benefit accruals of employees who have a protected minimum benefit under Part A. Plaintiffs’ claim is that although benefit accruals under Part A were frozen before Part B was introduced, Part B is still sufficiently dependent on Part A that the two plans can both be said to determine participants’ accrued benefits within the meaning of the aggregation rule.

The Court disagrees with Plaintiffs. It is true that a participant’s right to be paid her vested benefits from a prior version of the Plan may indirectly affect the accrual calculation under the new version of the Plan during the wear away period. However, the Court does not consider the mere comparison of benefits under Part A and Part B to constitute sufficient use of the terms of Part A to qualify for the application of the aggregation rule. The potential overlap of the two versions of CIGNA’s Plan, referred to here as a wear away period, is essentially an artifact of the transition from a defined benefit plan to a cash balance plan; it is not a backloading issue.

Even Plaintiffs’ expert, Mr. Poulin, admitted that if CIGNA had originally implemented a cash balance plan, rather than a defined benefit plan, there would

*323

have been no wear away for any employees,

see

Trial Tr. 409:15 to 410:16, and so no possibility of a backloading claim based on that wear away. Assuming that Part B is not itself violative of the 133-1/3% rule, then, Part B does not impermissibly back-load CIGNA employees’ benefits.

The Court finds further support for its decision in the fact that all other courts to have considered whether a transition from a defined benefit plan to a cash balance plan under a “greater of A or B” approach like CIGNA’s falls under the aggregation rule, have held that it does not. As the Third Circuit noted in

477 F.3d 56 , Plaintiffs’ “argument fails ... because it cannot surmount the barrier that the [aggregation rule] they cite does not apply in cases of plan amendments. Rather, it applies in cases where there are

two co-existing formulas under a single plan.

”

Id.

at 71-72 (emphasis added). Judge Hall also recently dismissed an almost identical argument under the aggregation rule in

Richards,

427 F.Supp.2d at 171 , on the ground that under 29 U.S.C. § 1054 (b)(l)(B)(i),

the Amended Plan is treated as having been in effect for all plan years, [and so] employees such as Richards would never have accrued a benefit under the Traditional Plan, and would have started accruing benefits under the cash balance formula from the start of their employment. Assuming such a scenario, such employees would suffer no backloading of benefits.

see also

Trial Tr. 909:4 to 910:9 (The Court: “I want to know more about the error [regarding the failure to include the Preserved Spouse’s benefit on Ms. Flannery’s benefit election form] because I’m very concerned.... [S]omebody ought to explain it and tell me ... that this is a one off, these things happen; or this is some

*340

thing more systemic.... [A]ll I’m saying is, I want to hear from you and I want to hear testimony from you.” Mr. Costello: “Sure, and you will”). Nor did CIGNA follow through on its assertion in its PreTrial Brief that “Defendants anticipate that a number of Plaintiffs and Class members will testify that they did not find the SPD misleading [and] were not wanting for any additional pension information.” Defendants’ Trial Brief [doc. # 182], at 64.

Instead, CIGNA offered statements that misled plan participants into believing that significant reductions in the rate of future benefit accrual were not a component or a possible result of Part B. For example, the inset panel on the first page of the 1997 Newsletter, featuring “A Message from CEO Bill Taylor,” states that he is “pleased to announce that, on January 1, 1998, CIGNA will

significantly enhance

its retirement program.” Ex. 516, at D00607 (emphasis added). The newsletter also notes that, in contrast to Part A, which benefitted primarily those employees who stayed with CIGNA “for their whole career,” “the new plan is designed to work well for

both

longer-and shorter-service employees. The new plan provides steadier benefit growth throughout your career.”

Id.

at D00610 (quotation marks omitted). Further, CIGNA stated explicitly that “[o]ne advantage the company

will not

get from the retirement program changes is cost savings.”

Id.

Thus, nothing in the Newsletter indicated to plan participants that their rate of benefit accrual might decrease, much less by a significant margin. And yet that is exactly what happened.

Even looking outside the purported § 204(h) notice to the other publications provided by CIGNA, information regarding possible reductions in the rate of future benefit accrual is equally non-existent. In the question-and-answer section of the Retirement Kit, for example, CIGNA reiterated that it “is

not

reducing the overall amount it contributes for retirement benefits, nor has the new program been designed to save money.” Ex. 508, at D00725.

While CIGNA admitted that certain long-term employees would remain in Part A because “[t]hese employees couldn’t match this benefit growth under the new plan,” it went on to assure readers that “[o]ther employees and all new hires will be able to earn

comparable benefits

as career employees under the CIGNA Retirement Plan.”

Id.

(emphasis added). With respect to those employees hired before 1989 but moved into Part B due to insufficient age and service points for grandfathering, CIGNA emphasized, “Our analysis showed that, in comparison to people with a higher age and service combination, you have plenty of time to take full advantage of the many attractive features of the Retirement Plan, plus you will have access to the new lump sum payment option.”

Id.

Later in the Retirement Kit, CIGNA reiterated, “The new Retirement Plan is different from the current Pension Plan, so exact comparisons of benefits that

*341

cover all possible outcomes are difficult. Generally speaking, the new Retirement Plan, in comparison with the current Pension Plan, tends to provide larger benefits for shorter-service employees and comparable benefits for longer-service employees.”

Id.

at D00729. Further, CIGNA noted that “[t]he lump sum distribution option can be very valuable.”

Id.

In the section entitled “Growth over time ...,” CIGNA reassured plan participants that “[e]ach dollar’s worth of credits is a dollar of retirement benefits payable to you after you are vested. Under the plan, your benefit will grow steadily throughout your career as credits are added to your account.”

Id.

at D00740. The SPDs made similar statements.

See

Ex. 505 (1998 SPD), at D00828; Ex. 506 (1999 SPD), at D00624. Last but not least, CIGNA assured its employees that “[t]he conversion factors we are using to determine your opening account balance are based on guidelines established by the government to ensure a fair transition for employees,” Ex. 508 (Retirement Kit), at D00726;

see also

Ex. 505 (1998 SPD), at D00838 (“The conversion formula used is based on guidelines established by the federal government for valuing pension benefits.”); Ex. 506 (1999 SPD), at D00627 (same), guidelines that CIGNA now admits do not exist.

See

Defendants’ Post-Trial Proposed Findings of Fact [doc. # 250], ¶ 19 (“There is no provision of law that sets forth minimum requirements for determining opening balances.”) (citing GAO Report on conversions to cash balance plans, Ex. 533).

CIGNA claims that the information it provided to plan participants regarding the opening account balances and how they were created, as well as the annual account statements and Total Compensation Reports, constituted sufficient disclosure of all the material aspects of the Plan, thus negating any deficiencies in the notices themselves. The Court disagrees. Although the Court recognizes that the opening account balance materials included a substantial amount of useful information regarding Part B, the Court does not accept CIGNA’s contention that the information it provided regarding the establishment of the opening account balances negates the defects in the previously provided notices and disclosures. For the problem lies not with the volume of information CIGNA chose to provide, but rather with some of the statements made in CIGNA’s disclosures, which the Court finds were not written in a manner calculated to be understood by the average plan participant and which failed to include important details regarding the transition to Part B that reasonable employees would have wanted to know.

CIGNA was aware of this potential for confusion. CIGNA stated clearly in the Retirement Kit that “exact comparisons of benefits ... are difficult,” Ex. 508, at D00729, and Mr. Sher, CIGNA’s expert, has compared the expression of benefits under traditional defined benefit plans and cash balance plans as “apples” and “oranges.” Ex. 68, at P2248. Simply providing information about the setup and content of the opening account balances could not counteract the more favorable impression made by CIGNA’s other statements about the positive features of the new plan and how employees’ benefits would grow under Part B. Finally, given the substantial amount of misinformation on the subject contained in the notices and disclosures CIGNA provided, the Court refuses to accept that the information regarding the opening account balances, while admittedly accurate, cured the defects in the previous disclosures.

See, e.g., In re Citigroup,

470 F.Supp.2d at 339 (“Plaintiffs had every reason to expect that under the new cash balance plan, their pensions would continue to accrue at a rate approved by Congress. It therefore is immaterial that the December 1999 § 204(h)

*342

notice stated in bolded font that the 2000 CBA could result in a reduction of their benefits. Given the material omissions, it remained insufficiently accurate and comprehensive to reasonably apprise plan participants and beneficiaries of their rights. Nor can it be said that the notices allowed applicable individuals to understand the effect of the plan amendment because plaintiffs were without fair warning that the formula endangered their right to a minimum rate of benefit accrual.”) (quotation marks and alteration omitted);

Hirt,

441 F.Supp.2d at 538 (“A notice is intended to give fair warning, and fails to do so if it is cryptic, or requires research beyond the document itself.”).

CIGNA employees suffered from the lack of accurate information in CIGNA’s disclosures, and CIGNA was aware of this fact. For example, in August 1997, CIG-NA asked a group of managers to review the cash balance plan. They recommended that CIGNA “[p]ublish case studies (positive and negative) and expect to be able to support employees who will be negatively impacted ASAP.” Ex. 106, at D11936. The focus group also urged CIG-NA to “[s]how illustrations that ‘prove’ small lump sums will yield equivalent benefits in the future (a lot of disbelief among managers about the way we handle data).”

Id.

Along the same lines, they noted, “General reaction to HR support is bad — too many examples of how poor the communications from HR have been in the past; low degree of reliance on information from the division.”

Id.

CIGNA did not adopt either suggestion. The managers’ concerns were borne out by the disclosures produced by CIGNA, as made clear by the responses to a questionnaire attached to the December 1997 Retirement Kit that asked, “What additional information would you like CIGNA to provide?” Employee responses included:

• “I don’t understand why CIGNA is not providing the details instead of saying trust me. Disclose details.” Ex. 107, at SuppD1601.

• “More specific detail re: calculation of lump sum.”

Id.

at SuppD1604.

• “CIGNA should plug in the individual employee’s actual percentage, salary and points making the same general assumptions and project the retirement under the old and new plan.”

Id.

• “Show me the math on the old vs. new. Did I win or lose? Since I have not been told I must assume I have lost. Please prove if otherwise.”

Id.

at SuppD1605.

• “An actual projection for retirement based on my exact income and time with CIGNA projected to age 65.”

Id.

• “If this was a benefit enhancement, actual individual comparisons would have been projected for each plan to show improvement. Our pension plan has been

reduced

but claims to be improved — integrity?”

Id.

at SuppD 1606.

• “Comparison to old pension plan i[.]e. dollar amount i[.]e. would lump sum distribution buy an annuity comparable to old pension plan?”

Id.

• “I have read the information and studied the examples; however, I am not sure how/what impact this will have on me. I trust CIGNA will be distributing individual specific^] in the future.”

Id.

• “A comparison for me personally of my benefit at retirement, given identical assumptions, under each plan[;] as I see it, unless the interest rate under the new plan exceeds 7% consistently, my benefit will turn out to be less than what I would have received under the old plan.”

Id.

at SuppD1607.

• “How much I accrued under the old program that will be transferred to the

*343

new and the real reason CIGNA made this change.”

Id.

• “This was useless information. I would like specific information regarding what I can look forward to as a retirement income. Am I better off before or after the changes in 1998? I certainly could not tell by this information.”

Id.

at SuppD 1609.

Despite these requests for further information, and the wealth of evidence indicating that CIGNA was well aware of the true effects on the rate of benefit accrual likely to result from the shift to Part B, CIGNA chose not to inform its employees about those effects in order to ease the transition to a less favorable retirement program. In fact, CIGNA explicitly instructed Mercer, the consulting company that helped CIGNA produce the 1997 Newsletter and 1998 Retirement Kit, “not to compare the old to the new plans” in those documents. Ex. 117, at SuppD1548;

see also

Ex. 29, at 2. In an internal email, David Durham, CIGNA’s Assistant Vice-President of Global Benefits, wrote, “We continue to focus on NOT providing employees before and after samples of the Pension Plan changes.” Ex. 119, at D11708;

see also

Ex. 120, at D020529 (internal request by CIGNA employee for “eomparison/projection of old/new benefits,” which the benefits

This text is long and has been trimmed here. Open the source document for the complete record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.