In Amara v. Cigna Corporation, Nos. 13-447-cv (Lead), 13-526 (XAP) (2nd Cir. 2014), the Second Circuit Court of Appeals (the “Court”) took up the long-running dispute arising out of certain misleading communications made by CIGNA Corporation (“CIGNA”) and CIGNA Pension Plan (together with CIGNA, “defendants”) to CIGNA’s employees regarding the terms of the CIGNA Pension Plan and, in particular, the effects of the 1998 conversion of CIGNA’s defined benefit plan (“Part A”) to a cash balance plan (“Part B”). The case had reached the U.S. Supreme Court.
The Supreme Court instructed the district court to consider on remand whether plaintiffs are entitled to relief under ERISA § 502(a)(3), which provides for “appropriate equitable relief” to redress specified violations of ERISA or of plan terms. On remand, the district court ordered CIGNA to provide plaintiffs with A+B benefits (that is, the plaintiffs receive their accrued benefits under Part A, in the form in which those benefits were available under Part A, and in addition their accrued benefits under Part B, in whatever form those benefits are available under Part B) and new or corrected notices, ordering such relief under §502(a)(3). Thus, the district court ordered a reformation of the plan, as the equitable relief under §502(a)(3). The defendants appealed. They argue that the district court erred in ordering equitable relief pursuant to § 502(a)(3). The plaintiffs argue that the court erred in limiting relief to A+B benefits, as opposed to affording them the benefits they would have received pursuant to Part A (a more favorable result to them).
In analyzing the case, the Court concluded that the district court did not abuse its discretion in determining that the elements of reformation have been satisfied and that the plan should be reformed to adhere to representations made by the plan administrator. Further, based on the particular facts of this case, the Court held that the district court did not abuse its discretion in limiting relief to A+B benefits