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This excerpt taken from the C 8-K filed Oct 13, 2009. Pension Plan Litigation. Beginning in June 2005, certain participants in
the Citigroup Pension Plan filed putative class action complaints against the
Citigroup Pension Plan and other Citigroup defendants, alleging violations of
ERISA. In September 2005, the claims were consolidated as IN RE CITIGROUP
PENSION PLAN ERISA LITIGATION in the United States District Court for the
Southern District of New York. Plaintiffs filed a consolidated amended class
action complaint alleging, among other things, that (i) the Citigroup
Pension Plan is impermissibly backloaded due to insufficient interest credits, (ii) the
Citigroup Pension Plan’s “fractional test” method of computing accrued benefits
is precluded under ERISA, (iii) the Citigroup Pension Plan illegally
discriminates based on age, and (iv) Citigroup Pension Plan participants
were not provided proper notice that the 2000 and 2002 cash balance amendments
would reduce the rate of future benefit accrual. In December 2006, the
District Court denied defendants’ summary judgment motion, granted summary
judgment to plaintiffs on their backloading, age discrimination and notice
claims, and ordered the Citigroup Pension Plan reformed to comply with ERISA.
The District Court also granted plaintiffs’ motion for class certification. In November 2007,
the District Court: (i) ordered that defendants fix the Citigroup Pension
Plan’s unlawful backloading by increasing pay credits, (ii) denied
plaintiffs’ request for additional relief on their backloading claims, (iii) denied
plaintiffs’ request for relief on their notice claims, and (iv) reserved
its rulings on the proper remedy, if any, for the Citigroup Pension Plan’s
violation of ERISA’s ban on age discrimination. In January 2008, the
District Court entered a partial final judgment on the backloading and notice
claims pursuant to Federal Rule of Civil Procedure 54(b) and stayed
the judgment pending appeal. Defendants filed a notice of appeal on January 22,
2008, and plaintiffs cross appealed on January 30, 2008; oral argument is
scheduled for March 2009.
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