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McCorkle v. Bank of Am. Corp., No. 11-1668

Decided: July 25, 2012

Plaintiffs brought multiple class action claims against Bank of America Corporation (BOA) for alleged violations of certain provisions of the Employment Retirement Income Security Act of 1974 (ERISA). The district court issued an order dismissing these class action claims. The court of appeals agreed with the lower court that the plaintiffs failed to state a claim upon which relief may be granted, and affirmed the district court’s judgment.

The plaintiffs and the class they represent are current and former employees of BOA, and participants in BOA’s pension plan. The thrust of plaintiffs’ claims is “that the Bank of America Pension Plan (‘the Plan’) employed a normal retirement age (‘NRA’) that violated ERISA in calculating lump sum distributions and further ran afoul of ERISA’s prohibition of ‘backloading’ in the calculation of benefit accrual.”

On appeal, the plaintiffs largely abandoned their claim regarding the NRA as used to calculate lump sum distributions, and the court agreed that the Plan’s NRA complies with ERISA in that respect. The court of appeals then addressed the plaintiffs’ second contention, that the Plan’s NRA violates ERISA’s backloading provisions. The court found this argument to lack merit since ERISA’s backloading rules do not apply once a plan participant reaches the NRA. In other words, “if the anti-backloading rules only restrict benefit accrual calculations prior to NRA, Plaintiffs cannot plausibly claim that a benefit calculation after NRA runs afoul of the backloading provisions of ERISA.”

The court also briefly addressed the plaintiffs’ claim that the Plan’s Summary Plan Description (SPD) affirmatively misled participants by describing an NRA different from that actually utilized by the Plan. While the court of appeals found that the district court’s holding with regard to this claim was erroneous, it affirmed the lower court’s judgment on other grounds, ultimately finding that the SPD adequately informed Plan participants of the manner in which benefits are calculated.

In summary, the court of appeals agreed with the district court that the plaintiffs failed to state a claim upon which relief may be granted with respect to the Plan’s NRA as used to calculate benefit accrual or the alleged violations of the backloading provisions, and affirmed the district court’s judgment.

Full Opinion

– Kassandra Moore