Second Circuit: Class-Wide Reformation Is Appropriate Equitable Relief

In the latest chapter of the Amara saga, the Second Circuit recently affirmed the district court's class-wide order to reform CIGNA's cash balance plan, as a means to remedy what the district court previously found to be CIGNA's breach of its statutory notice obligations.

Background

When CIGNA converted its pension plan from a traditional defined benefit plan to a cash balance plan, participants experienced a period of "wear-away" during which participants were not accruing additional benefits because the value of the benefit earned prior to the conversion exceeded the initial value of the cash balance benefit. In an earlier decision, the district court found that CIGNA's section 204(h) notice and summary plan descriptions (as well as related communications) issued in relation to the conversion misled participants by explicitly promising that their starting balances in the cash balance account would be "equal" to the benefits previously earned under the prior plan