Pender v. Bank of America Corp.,
et al., 05-238-C (W.D.N.C.)
This case challenges the
legality of the design and operation under ERISA of
two large retirement plans sponsored by Defendant Bank
of America Corporation (“Bank of America”
or the “Bank”) for the Bank’s employees.
The first is the Bank of America Pension Plan (the “Pension
Plan”), which is a “cash balance”
defined benefit pension plan. The other is the Bank
of America 401(k) Plan (the “401(k) Plan”),
which is a defined contribution retirement savings plan.
The Complaint
alleges that the Pension Plan calculates benefits based
on an improper definition of “retirement”
– or more specifically, “normal retirement age,”
which the Plan defines as the 5th anniversary of each
employee’s date of hire, regardless of age. We argue that this
fictitious retirement “age” is essentially a
gimmick designed to mask the fact that the Plan fails to pay participants
the benefits to which they are legally entitled. It results, according
to the
Complaint, in illegal forfeitures of accrued pension
benefits, systematic age discrimination, and excessively
“backloaded” benefit accruals.
The Complaint
also alleges that the Bank caused the 401(k) Plan, in
a series of transactions implemented over several years,
to transfer approximately $3 billion from individual
participant accounts to the Pension Plan, where the
assets were not placed in individual accounts but were
commingled with other Pension Plan assets. The IRS,
which regulates pension benefit plans, recently concluded
after conducting an audit of the Plans that, just as we argue,
these transfers resulted in unlawful forfeitures
of participants’ accrued benefits. See Bank of
America March 2005 SEC 10-K. The transfers also resulted
in unlawful use of 401(k) Plan participants’ retirement
savings by the Pension Plan and the Bank.
Motions in the case are currently
awaiting decision by the Honorable Graham C. Mullen,
Senior Judge, Western District of North Carolina
(Charlotte).
Current and former participants in
the Bank’s Pension or 401(k) Plans are encouraged
to contact us to provide us with information about their
individual circumstances or understand the case in more
detail.
Aspects of the case have been
discussed in the press. Links
to some of the articles are provided here. However,
please note that we do not necessarily accept these or
other articles referenced on our site as accurate
portrayals of the legal or factual issues in the case.
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