2007-02-15

The court's decision adds additional uncertainty to the status of cash balance plans, particularly with the application of backloading rules.

The U.S. District Court for the Southern District of New York ruled on December 12, 2006, that Citigroup Inc.'s cash balance pension plan illegally discriminates against older workers. Among other conclusions, the court found that the cash balance plans are not age neutral and thus violate ERISA.

The attached PDF discusses the district court's findings in this case and provides Hewitt comments on implications for employers.

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