Former McDonnell Douglas workers file class action over pension plan

Steve Gonzalez Jul. 6, 2006, 7:19am

Jerome Schlichter

Matt Armstrong

Four former McDonnell Douglas employees who went to work for Boeing after the two companies merged filed a class action complaint against the Pension Value Plan for Employees of The Boeing Company.

Class representatives Larry Wheeler of Edwardsville, David and Maral Keeton of Wildwood, Mo., and Vincent Parisi of Bellefontaine Neighbors, Mo. are seeking injunctive relief pursuant to Employment Retirement Income Security Act (ERISA) claiming the current method of calculation is unlawful.

The suit was filed in U.S. District Court for the Southern District of Illinois on June 26.

According to the complaint, the plaintiffs' employment was transferred to Boeing on Aug. 1, 1997, as a result of the Boeing/McDonnell Douglas merger.

They claim their retirement benefits are less than the accrued benefit to which they are legally entitled because the plan failed to properly apply accrual and vesting rules imposed by ERISA.

"The conduct complained of is widespread, affecting hundreds of plan participants," the complaint states.

The Employee Retirement Income Security Act of 1974 is a federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans.

ERISA requires plans to provide participants with plan information including important information about plan features and funding; provides fiduciary responsibilities for those who manage and control plan assets; requires plans to establish a grievance and appeals process for participants to get benefits from their plans; and gives participants the right to sue for benefits and breaches of fiduciary duty.

The plaintiffs claim that the plan violates the anti-back loading provisions of ERISA by making benefits accrue very slowly over time until the participants nears the normal retirement age so that a participant's vested pension rights have very little value until they complete a very long period of service.

"ERISA requires that a defined benefit plan must allow a participant to accrue, i.e. earn benefits no less that ratably over a working career so as to prevent employers from using creative plan designs to avoid the protection afforded by ERISA's vesting rules," the complaint states.

The plaintiffs claim they and class members are entitled to appropriate equitable relief to redress the plan's violations of ERISA and to enforce provisions, and incidental monetary relief mechanically flowing from injunctive relief in the form of a common fund equal to the difference between what they and class members were paid under the alleged unlawful method of computing their pension benefits.

The plaintiffs are asking for this case to be certified as a class action, a declaration that the pension plan's method of computing benefits is unlawful, a judgment for them and against Boeing and a permanent injunction preventing the plan from calculating pension benefits in violation of ERISA.

They are also seeking the creation of a common fund equal to the amount of pension benefits due, pre and post judgment interest, attorneys' fees and costs pursuant to the common fund/benefit doctrine or any other applicable laws and any other relief the court deems appropriate under the circumstances.

The class will be represented by Jerome Schlichter and Matthew Armstrong of Schlichter, Bogard & Denton of Swansea.

The case has been assigned to Judge David Herndon.

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The Boeing Company
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