Stephen R. Bruce
Attorney for Plaintiffs

202.289.1117 phone
stephen.bruce@prodigy.net

1667 K Street NW, Suite 410
Washington, DC 20006

ORDER ON MOTION TO DISMISS

Miller, J.
This matter is before me on a motion filed by Defendants El Paso Corporation
and El Paso Pension Plan (collectively El Paso) on March 30, 2005, requesting
dismissal of some or all of Plaintiffs’ claims, a more definite statement of Plaintiffs’ Second Claim, or an order striking Plaintiffs’ jury demand. Upon review of the parties’ filings, I conclude oral argument is not required. For the reasons that follow, the motion will be granted to the extent it seeks dismissal of Plaintiffs’ Third Claim, and otherwise denied.

Background

(As is appropriate in the context of a motion to dismiss, the following facts are
taken from Plaintiffs’ allegations.)

This case arises out of El Paso Corporation’s conversion of its pension plan from a final average pay formula, to a cash balance formula. Under the old plan, the amount of a retiree’s monthly pension was based upon their years of credited service and a final average of salary. Under the new plan, this amount is based upon the amount of credits employees accumulate throughout their years of service. Each participating employee is given a hypothetical account, and each quarter the employee earns “pay credits” based upon a percentage of their salary, and “interest credits” based upon the yield of a fiveyear U.S. Treasury Bond. See generally, Register v. PNC Fin. Servs. Group, Inc., 477 F.3d 56, 6163 (3d Cir. 2007) (comparing and contrasting traditional definedcontribution plans, traditional definedbenefit plans, and cash balance plans).

During a transition period between January 1, 1997, and December 31, 2001, participating employees accrued benefits under both the new and old plans, and retiring employees could elect whichever option benefitted them the most. Once this transition period expired retirees could still choose either option, but the old plan was“frozen” at whatever benefits the employee had earned as of December 31, 2001.

The full Court's Decision to Dismiss (March 27, 2007) is 10 pages in length. Click to download the full Decision in pdf format. You may wish to download Adobe Reader, which is needed to read pdf files.