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Cigna Corp. v. Amara

563 U.S. 421 (2011)

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Cigna Corp. v. Amara

United States Supreme Court

563 U.S. 421 (2011)

Facts

Cigna Corporation (defendant) changed its retirement benefit plan from a defined benefit pension to a defined contribution plan in 1998. As part of the change, Cigna calculated a lump sum due to current employees and deposited that amount into their respective defined contribution retirement plan. Cigna provided notice to its employees in November 1997 of the upcoming plan change. In that notice, Cigna stated that the new plan would significantly enhance the retirement program, would produce an overall improvement in retirement benefits, would provide the same benefit security with steadier growth, and would not result in cost savings to the company. However, these representations were not true. When the full details of the plan were announced in 1998, Cigna recognized approximately $10 million in annual savings, and a significant number of employees were worse off. The plan did guarantee that an existing employee would receive at least the greater of either the amount that the employee would have received under the old plan as of January 1, 1998, or the amount in their individual retirement account. A group of employees (plaintiffs) sued Cigna, alleging violations of the Employee Retirement Income Security Act of 1974 (ERISA) due to the misleading 1997 notice. The trial court agreed that the 1997 notice was misleading and inadequate. The trial court, relying on ERISA § 502(a)(1)(B), ordered Cigna to reform the new plan to give employees the combined benefit of the amounts that would have been due under the old plan as of January 1, 1998, added to the amounts due under the new plan, excluding the initial lump-sum deposit. Cigna appealed.

Rule of Law

Issue

Holding and Reasoning (Breyer, J.)

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