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WASHINGTON, DC, July 11, 2008 — Covington & Burling LLP secured a major victory for Verizon in the Second Circuit, where a three-judge panel ruled on July 9 that cash balance plans do not violate federal law (Hirt v. The Equitable, Bryerton v. Verizon, 2d Cir., No. 06-4757-cv). In issuing its ruling, the Second Circuit followed three other federal appeals courts that in the past two years have similarly concluded that cash balance plans do not discriminate against older workers in violation of the Employee Retirement Income Security Act.
Covington’s Jeffrey Huvelle, who chairs the firm’s ERISA litigation practice and argued the appeal for Verizon, commented: “This is an important victory because a significant percentage of all retirement plans use a cash balance formula, and numerous suits have been brought alleging that such plans violate the age discrimination provision of ERISA.”
Huvelle, who also won a similar victory in the Seventh Circuit in 2006 (Cooper v. IBM Personnel Pension Plan, 457 F.3d 636), went on to characterize the Second Circuit’s ruling as a “knock-down punch” in the controversy over the lawfulness of cash balance plans. To date, no circuit has ruled against cash balance plans on this issue.
Assisting Huvelle on the Verizon case was special counsel Eric Sonnenschein. Both are resident in Covington’s Washington office.