August 23, 2019

Tenth Circuit: ERISA Does Not Require Notification of Wear-Away Periods During Pension Transition So Long As Employees are Informed of Plan Changes

The Tenth Circuit Court of Appeals issued its opinion in Tomlinson vs. El Paso Corp. on Wednesday, August 10, 2011.

The Tenth Circuit affirmed the district court’s decision. The case is a putative class action in which Petitioners appeal the dismissal of their claims against Respondent and the El Paso Pension Plan brought under the Age Discrimination in Employment Act (ADEA) and the Employee Retirement Income Security Act (ERISA). Petitioners’ claims concern “wear-away periods” that occurred during Respondent’s transition to a new pension plan; they contend that the wear-away periods violate the ADEA’s prohibition on age discrimination and the anti-backloading and notice provisions of ERISA.

However, the Court disagreed and found that Respondent’s transition favored, rather than discriminated against, older employees. Also, the plan was frontloaded, rather than backloaded. The Court held that ERISA does not require notification of wear-away periods so long as employees are informed and forewarned of plan changes. Because Respondent provided sufficient notice and warning to Petitioners, the district court’s decision was upheld.

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