A Texas federal judge has ruled that Verizon pension beneficiaries can sue the company as a group over its transfer of $8.5 billion in plan obligations to the Prudential Insurance Co., which turned the pensions into annuities.
U.S. District Judge Sidney Fitzwater said that the lawsuit on behalf of the 41,000 people affected can proceed as a class action on claims that the transfer of funds violated federal law establishing standards for private pension plans, according to a Bloomberg article.
Fitzwater also said that another 50,000 plan participants whose benefit payment obligations weren’t transferred to Prudential can sue as a group.
In October, Verizon announced that it planned to shift about a quarter of its pension obligations to Prudential to eliminate risk from its balance sheet, and in a November lawsuit the plaintiffs said the Verizon transfer would eliminate the protections of federal law and cause irreparable harm.
Verizon has said that the lawsuit is without merit and one of the company’s spokesmpeople declined to comment on the judge’s recent order.