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December 10, 2012 at 08:59 AM
A federal court has approved a plan by Verizon Communications to sell its pension obligations to Prudential Insurance Company.
In a memorandum and opinion issued on December 7, the U.S. District Court for the Northern District of Texas, Dallas Division okayed the sale. The judge noted the plaintiffs in the civil action, representatives of plan participants and beneficiaries of the Verizon Management Pension Plan, had failed to persuade the court that the relief sought, a preliminary injunction on transaction, was justified.
“Because the plaintiffs have failed to carry their burden of showing a substantial likelihood of success on the merits,” the judge stated in the order, the court rejected the requested for a preliminary injunction.
Verizon plan participants’ complaint rested on several claims. Among them: (1) that Verizon violated ERISA Section 102(b) by not disclosing in its summary plan description that it retained the right to transfer its pension obligations to a life insurance company; (2) that Verizon breached its fiduciary duties, in violation of ERISA Section 404(a)(1); and that (3) Verizon violated ERISA Section 510 by discriminating against the group of affected retires to interfere with their rights under the plan.
