Alliant Pension Class Action Website
(Last updated: April 11, 2014)
Latest News: Final judgment has been entered and final payouts will begin soon
This website concerns Ruppert, et al. v. Alliant Energy Cash Balance Pension Plan, a class action filed in February 2008 under the federal pension law known as “ERISA.” The case challenges the manner in which the Alliant Energy Cash Balance Pension Plan (the “Plan”) calculated pension benefits between 1998 and August 2006, and again in 2011 after Alliant amended the Plan in a way that led to some increased benefits for some participants but typically far less than the amounts that the Honorable Barbara B. Crabb of the United States District Court for the Western District of Wisconsin ruled that the Plan was required to pay after a 2010 trial.
Counsel for the three named plaintiffs (Lawrence Ruppert, Thomas Larson, and Shannon Bohannon) created and maintain this website to keep class members informed as to the case’s progress. For additional information, please contact counsel directly:Gottesdiener Law Firm, PLLC
498 7th Street
Brooklyn, NY 11215
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On January 8, 2014, the district court entered a Final Judgment declaring that the Plan violated ERISA by not applying a “projection rate” of at least 8.2% in calculating Class A members’ lump sums for those Class A members who received lump sums on and after March 1, 2002, and by improperly applying a pre-retirement mortality discount when calculating class members’ lump sums. The Court awarded class members approximately $9 million in additional Plan benefits and prejudgment interest through September 6, 2012 plus post-judgment. The Court also set out the timeframe and plan of allocation for distribution of the additional benefits and pre- and post-judgment interest awarded to Plaintiffs and class members, incentive awards to Plaintiffs Ruppert and Larson, and also confirmed that its earlier February 4, 2013 attorney’s fees and cost award was fair and proper. Defendants have subsequently sent out election forms to class members entitled to additional benefits and disbursements will begin soon.
Additional information concerning the case and the litigation history can be found below.
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By way of background, the Plan was and is a “cash balance” defined benefit pension plan, which defines benefits by reference to a notional “account” comprised of “pay credits” and “interest credits.”
Throughout the relevant time, the Plan’s interest crediting rate provided participants annually with the greater-of: (i) 75% of the Plan’s annual asset returns or (ii) 4%.
Originally, the 1998 Plan estimated the value of future interest credits to be equal in all years to the applicable 30-year Treasury bond projection rate (the same rate the Plan used, and was required to use, to discount participants’ accrued, age 65 benefits to present value when calculating lump sums). That caused all participants to receive payments equal to their notional account balances.
In 2011, Alliant amended the Plan to eliminate the 30-year Treasury bond projection rate and retroactively replaced it with different, but in all cases higher rates based on a 1-to-5 year average of the Plan’s most recent interest crediting rates as of the year of the participant’s lump sum distribution. At the same time, the Plan implemented the amendment by recalculating all affected participants’ benefits – and in doing so applied a pre-retirement mortality discount (“PRMD”) that it had not previously applied – and made additional payments to some participants.
However, Judge Crabb ruled in 2010 after trial , and ruled again in 2012 that in all years the Plan’s projection rate for calculating lump sums could not be lower than 8.2%. Under the amended, 2011 Plan, the projection rate was lower than 8.2% for all participants in the class except for those who received a distribution in 2006. Judge Crabb also ruled in 2010 and again in 2012 that the Plan could not apply a PRMD when calculating lump sums.
The Court of Appeals panel in 2013 agreed with Plaintiffs that the adoption of the 2011 amendment providing projection rates less than 8.2% was a “fresh violation” of law but held that Judge Crabb nevertheless erred in finding that the 2011 amendment created a new statute of limitations period in 2011 for challenges to the sufficiency of the projection rates lower than 8.2% (thus making all participants’ challenges to the sufficiency of the new rates necessarily timely). The Court of Appeals held that, despite the Plan’s “fresh violation” of the law in adopting rates lower than the statutorily-required minimum rate, no new statute of limitations period arose because the injury that violation inflicted was not a “fresh injury.”
As for when the applicable 6-year limitations period began to run, the Court of Appeals said that it began to run on the date participants first received a payment from the Plan, and that Mr. Larson, who received his initial payment in 2000, more than 6 years prior to the date suit was filed, could no longer challenge the sufficiency of the Plan’s projection rate.
For those interested in more detailed information about case happenings over the years, the following provides some of the key developments in the case and in the operation and administration of the Plan:
The case was filed in February 2008. An amended Complaint was filed on April 28, 2008. The Plan moved to dismiss the Complaint. The Court denied that motion in its Order of August 25, 2008. The Plan's Answer was filed on February 13, 2009.
Following the Court’s denial of the Plan’s motion to dismiss, discovery commenced but the parties could not reach agreement on the proper scope of discovery. Plaintiffs moved to compel complete responses to their written discovery requests. The Court granted Plaintiffs’ motion in its Order of December 18, 2008.
Plaintiffs moved for class certification in November 2008. The Plan opposed the motion and took the depositions of Mr. Ruppert and Mr. Larson, the named Plaintiffs in this case, in December 2008. The Court certified the case as a class action in its Order of February 12, 2009. In so doing, it appointed Eli Gottesdiener of the Gottesdiener Law Firm, PLLC, as Class Counsel to represent members of the two Subclasses. The Court ruled in April 2009 that class members should receive notice to notify them of the pendency of the suit, the issues involved in the suit and the potential effect of the suit on their rights and then approved the notice itself in June 2009. Accordingly, notice was mailed to lump sum recipient class members in June 2009 that provided an objective statement of the case as it stood in June 2009 and directed lump sum recipient class members to this website.
Discovery was conducted between December 18, 2008 and May 2010. The Court ruled on the parties’ cross-motions for summary judgment in its Order and Opinion of June 3, 2010. The District Court agreed with the Plaintiffs that the Plan miscalculated participants’ benefits, that the Plan was not entitled to deference as to its preferred method for determining damages, and that participants were not time-barred from bringing this action because the Plan administrator had not given notice to participants how the Plan was calculating participants’ lump sum benefits. The Court also said that a trial would be necessary to resolve the question of what projection rate should be used in place of the 30-year Treasury rate. A trial was held during the third week of June 2010 to establish how benefits should have been calculated.
On December 29, 2010, the Court issued its verdict, in the form of an Opinion and Order. In that order, the Court held that the Plan should have projected the notional accounts of participants taking pre-age 65 distributions at the rate of 8.2% per annum instead of the 30-year Treasury bond rate that the Plan had used (which was the yield on the applicable 30 year Treasury bond during the relevant January 1, 1998 to August 17, 2006 time, which averaged around 5%). This rate was much closer to the rate Plaintiffs proposed than what the Plan had proposed at trial. The Court also rejected a second alternative projection rate proposed by the Plan at trial, involving the use of an up-to-5-year rolling average, the same projection rate that Defendant amended the Plan to include in May 2011, as discussed above. In addition, the Court denied the Plan’s request to apply a pre-retirement mortality discount in recalculating lump sum benefits.
On December 30, 2010, the Court issued a further Order denying the Plan’s motion to re-open the trial record to introduce IRS correspondence in support of its up-to-5-year rolling average proposal, explaining that even if the IRS accepted the Plan’s proposal for resolving the Plan’s alleged Tax Code violations, that did not control the outcome of Plaintiffs’ ERISA claim. The Court explained that even if the IRS’s position were considered, the Court would still reject the up-to-5-year rolling average proposal because it would retroactively and unfairly “deprive [participants] of the ability to choose when to receive their benefits.” On March 30, 2011, the Court denied the Plan’s motion to reconsider its December 30, 2010 ruling.
As a result of the Plan’s May 2011 amendment, discussed above, the Plan made payments to some 539 lump sum recipient class members and 4 annuity recipient class members on July 31, 2011 or December 1, 2011.
Plaintiffs requested in September 2011, and were granted leave by the Court in its Order of November 23, 2011, to file an Amended Complaint alleging that the May 2011 amendment violated the ERISA statute because it provided for a projection rate less than that required by the statute (and found required by the Court after trial in 2010, as discussed below) and, also in violation of the Court’s orders, the Plan used a PRMD in calculating lump sums. Plaintiffs filed the Amended Complaint on November 30, 2011 seeking damages or increased benefits for all class members, including those who received an additional payment in 2011.
The parties litigated the claims raised in the Amended Complaint throughout 2012. On January 13, 2012, the Plan answered the Amended Complaint. In February 2012, the parties filed additional expert reports and rebuttal expert reports. In March and April 2012, the parties filed cross-motions for summary judgment and briefed the issue of class certification.
On July 2, 2012 , the Court ruled that Defendant violated the ERISA statute by not applying a “projection rate” of a minimum of 8.2% in calculating class members’ lump sums. The Court also ruled that Defendant violated the ERISA statute by improperly applying a PRMD in calculating class members’ lump sums. In order to implement the Court’s ruling, the parties then filed separate proposed judgments and supporting calculations to the Court in July 2012. Defendant argued that, notwithstanding the Court’s order, some lump sum recipient class members should still have their projection rate determined using a 1-to-5-year average methodology and with a PRMD applied. Plaintiffs disagreed.
On August 24, 2012, the Court ruled in favor of Plaintiffs’ proposed judgment and supporting calculations. The Court’s August 24 Order was embodied in the form of a final court judgment entered by the Clerk of Court on August 29, 2012, later amended on September 6, 2012.
On September 10, 2012, Plaintiffs mailed the Court-approved Notice. Shortly thereafter, Plaintiffs and class counsel filed their fee petition and were subsequently awarded, assuming the Court’s judgment is affirmed on appeal, a combined $6.4 million in fees and expenses, from which the two named plaintiffs are entitled to $7,500 each in incentive payments.
On August 9, 2013, the Court of Appeals for the Seventh Circuit affirmed in part and reversed in part the September 6, 2012 final judgment entered by Judge Crabb in favor of two classes of Plan participants and remanded the case to the district court for further proceedings consistent with its decision. The decision was unfavorable to participants like Plaintiff Larson who received lump sums more than 6 years before the date suit was filed, that is, prior to March 1, 2002. Accordingly, Mr. Larson and other pre-March 2002 lump sum recipients (“pre-SOL participants”) can no longer challenge the adequacy of the current, amended Plan’s “projection rates” as a reasonable, good faith estimate of participants’ future interest credit entitlement under the Plan through age 65.
At the same time, the Court of Appeals’ decision rejected the Plan’s various substantive challenges to the September 2012 final judgment. In virtually all respects, the decision was favorable to Mr. Ruppert and participants who received their original payments after February 2002 (between March 2002 and August 17, 2006, the end of the class period). All of those participants are entitled to receive the same amounts awarded under the September 2012 final judgment (adjusted for additional interest that has since accrued).
Favorable aspects of the Court of Appeals ruling can be summarized as follows:
First, as noted above, participants who received their original payments within 6 years of the date suit was filed, i.e., between March 2002 and August 17, 2006, are not time-barred from challenging the sufficiency of the amended Plan’s projection rate.
Second, as also noted above, the Court of Appeals rejected the Plan’s various challenges to Judge Crabb’s ruling under which she required that the Plan use an 8.2% minimum projection rate.
Third, the Court of Appeals rejected the Plan’s statute of limitations and class certification challenges as to Plaintiffs’ PRMD claims. The Court of Appeals held that even in the case of someone like Mr. Larson who received an original payment more than 6 years before the date suit was filed, the application of a PRMD constituted both a “fresh violation” and a “fresh injury” because it was a type of violation and injury that was only first committed and inflicted in 2011. The Court of Appeals therefore found both Mr. Ruppert and Mr. Larson appropriate class representatives as to Subclass B, comprised of participants with PRMD claims.Finally, in recognition of the merit of their claims and general lack of merit of the Plan’s challenges, the Court of Appeals awarded costs to both Mr. Ruppert and Mr. Larson.
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If you have any questions, do not hesitate to contact us via the site or by calling our offices and asking to speak to a staff member assigned to the Alliant case using the contact information provided near the top of this page.