The Third Circuit today agreed with its Seventh sibling on an important ERISA issue. Both courts held that cashing out of an employer’s retirement plan doesn’t kill the right to sue under the Employee Retirement Income Security Act to recover benefits for the plan. The casher-outer still can bring action to get what he should have received at the time he cashed out. Graden v. Conexant Systems Inc., No. 06-2337 (3d Cir. July 31, 2007) (agreeing with Harzewski v. Guidant Corp., 2007 WL 1598097 (7th Cir. 2007)).
Blawgletter reckons that the decision may sound wee arcane. But it will likely mean money in the pockets of thousands, if not millions, of deserving retirees.
Many a corporation, like Conexant, sponsored ERISA plans that encouraged workers to bet their retirement accounts on the company’s stock. The practice flew in the face of diversification theory. Not only would an employee’s job (and income) depend on how well the company did; her nest egg would, too.
We have a case like that. Graden will help our dear clients get their due.