Third Circuit Upholds Cash Balance Plan Design

On Tuesday, the Federal Court of Appeals for the Third Circuit affirmed dismissal of a class action against the PNC Financial Services Group, its cash balance pension plan, and its plan committee. Register v. PNC Financial Services Group, Inc., Court of Appeals No. 05-5445 (3rd Cir., Jan. 30, 2007). The court rejected plan participants’ claims that cash balance plans inherently discriminate against older workers because of age, and that the PNC plan violated ERISA’s prohibition against “back-loading,” i.e., providing low rates of accrual in earlier years of employment and concentrating accrual of benefits in later years of employment.