In college, he was a lightweight wrestler. These days, William K. Carr is a heavyweight pension lawyer who dukes it out with some of the nation's largest corporations.
Three years ago the slight, bespectacled lawyer began to help focus the nation's attention on how some older workers might lose out when their companies convert traditional pension plans to cash balance plans.
He was the first to file a lawsuit- Robert H. Aull vs. Cavalcade Pension Plan - against a large corporation alleging violations of age discrimination under federal pension law in a cash balance conversion.
His crusade resulted in the first congressional hearing on cash balance plans in June 1999, and his-behind-the-scenes lobbying helped kill legislation that could have made it tougher for participants to sue employers for losses of pension benefits resulting from cash balance conversions.
In 2001, Mr. Carr scored a huge victory in the case against Onan Corp. The company, a subsidiary of Cummins Engine Co., Indianapolis, reached a settlement that could hand over between half and two-thirds of its pension plan's $65.5 million in assets - as much as $10,810 per person - in sweetened benefits to all 3,700 vested employees and retirees (Pensions & Investments, Oct. 1).
He also scored against Xerox Corp., Stamford, Conn., when a federal judge ruled the struggling company might have to pay as much as $300 million to retired workers as a result of having miscalculated the lump-sum payments it gave to departing workers under its cash balance plan.
And, a judge gave the green light to a class-action lawsuit in which Mr. Carr is representing workers and retirees against IBM Corp., Stamford, Conn., over its 1999 conversion to a cash balance plan.
Also, the prolific plaintiffs' lawyer has filed a class-action lawsuit against the cash balance plan of BOC Group Inc., Murray Hill, N.J., and expects to reach a settlement over yet another pension dispute. Mr. Carr also has several other pension lawsuits in the works, but he refused to discuss them.
He has courted the national media and lawmakers, disseminating transcripts and tape recordings of actuaries and pension consultants discussing how employees would never figure out how the switch to cash balance plans could hurt them. Yet he professes to be publicity shy.
Mr. Carr, 53, spoke for this story only reluctantly.
"I am not the issue. This is not about me or any other lawyer representing employees," he said repeatedly.
But to scores of corporate pension lawyers and actuaries and the legions of consultants advising pension plan sponsors, he is the issue.
At an American Bar Association meeting in Atlanta in August 1999, Greg Braden, a partner at the Atlanta law firm of Alston & Bird, ended his presentation on cash balance plan litigation by invoking Mr. Carr's name.
"Some of you may recall that in Mr. Carr's testimony to Congress last spring on cash balance plans, he played seminar tapes in which actuarial and legal consultants were talking about the cost-cutting effect of cash balance plans. That testimony was covered extensively in The Wall Street Journal and led to a number of fairly pink and red faces among the consultant community, and I hope none of you here were victims of that ... So, Bill, if you're in the audience, just be sure to spell my name right, OK?" Mr. Braden said.
Kyle N. Brown, retirement counsel at Watson Wyatt Worldwide in Washington, who is among those on tape, declined to comment on Mr. Carr.
He's not alone. A host of experts on cash balance plans issued uncharacteristic "no comment" statements on Mr. Carr, including:
* Ron Gebhardtsbauer, senior pension fellow at the American Academy of Actuaries, the Washington-based organization that represents the profession, and part of a group that briefed lawmakers on Feb. 16, 1999;
* Officials at Unifi Network (now part of Buck Consultants Inc., New York), which pioneered the cash balance plan design in the mid-1980s and designed Onan's plan, and whose principal Larry Sher was part of the group briefing lawmakers;
* James M. Delaplane Jr., vice president of retirement policy at the American Benefits Council, a Washington-based trade group whose members include IBM, Onan, Xerox and other companies involved in disputes with Mr. Carr;
* Bill Sweetnam, benefits tax counsel at the Treasury Department, who was the majority counsel for pensions to the Senate Finance Committee until December 2000. Mr. Sweetnam drafted legislation, which passed the committee but was not subsequently acted upon, that would have eliminated questions about many of the aspects of cash balance pension plans that are the subject of legal dispute.
"Like any good attorney, he is zealous in defending his clients," said Robert Rachal, a partner in the New Orleans law firm of McCalla, Thompson, Pyburn, Hymowitz & Shapiro LLP. Mr. Rachal represented the employer in Aull vs. Cavalcade, which was settled in 1999 (P&I, April 19, 1999).
Mr. Rachal calls Mr. Carr an "effective opponent" who pursued an aggressive strategy.
Mr. Carr is upfront about having dug through tapes and transcripts of pension actuaries' and consultants meetings for evidence that employers' motives are less than altruistic when they switch from traditional defined benefit plans to cash balance plans.
"I am truly offended by some of the things I have seen," he said.
And it is not just actuaries and consultants he rails against.
"The only pensions people at administrative agencies are interested in protecting are their own," he said. In an article on federal pension law, published in the Winter 1992-1993 issue of the Stanford Law & Policy Review, Mr. Carr openly criticized the Department of Labor's pension office for an "apparent lack of concern." He quoted Alan D. Lebowitz, the top career official at the department's Pension and Welfare Benefits Administration, as saying, "We have no legal obligation to help people, to put it crudely."
When P&I contacted Mr. Lebowitz for a response to Mr. Carr's article, Mr. Lebowitz said the Labor Department does not have the authority to represent participants in lawsuits. Lawmakers drafting the Employee Retirement Income Security Act in the early 1970s considered giving the Labor Department that authority, but they rejected the idea, he said. In recent years, however, the Labor Department has taken several steps to help participants seek redress, including establishing a toll-free hotline and a program to protect plan assets when companies file for bankruptcy, and providing information about filing age-discrimination complaints.
Mr. Carr and co-author Robert L. Liebross, a Denver-based pension lawyer, noted that because of government policy, "employees who must fend for themselves often end up losing their benefits."
To understand why Mr. Carr is so incensed about cash balance plans, it helps to know that the frenetic tax lawyer, who works a punishing seven-day-a-week schedule, is intimately familiar with the U.S. tax code. He worked as a trial attorney in the New York office of chief counsel at the Internal Revenue Service in the mid-1970s before setting up practice as a pension lawyer, first in California, then in Colorado.
His co-counsel and friends describe this lawyer, who likes to dress in flannel shirts and jeans, as dogged and persistent.
"When he digs in, he keeps going. It's hard to dissuade him from something he thinks is worth the fight," said Doug Sprong, a partner in the Bellville, Ill., law firm of Carr, Korein, Tillery, Kunin, Montroy, Cates, Katz & Glass LLC. Mr. Sprong worked with Mr. Carr on the Xerox case and is working with him on the IBM and BOC cases.
Mr. Sprong said Mr. Carr has the idealism of a '60s "brick-throwing hippie at Berkeley," but he is not jousting at windmills. "When he sees something that he perceives to be actuarial acrobatics, he thinks it should be fixed."
Mr. Carr defies the stereotype of plaintiffs' lawyers as ambulance chasers, his friends and acquaintances say. "He doesn't like it when he sees the rules being abused," said one.
But Mr. Carr also has plenty of detractors.
"The legal ethics of the way (plaintiffs' attorneys) practice law are very questionable," said a source who declined to be identified. "Ultimately, they do this for money," the source said.
And Michelle L. Varnhagen, minority counsel to the House Education and the Workforce Committee, worked at the Pension Rights Center when the cash balance issue came to a head in Congress. She and others representing participants were disappointed when Mr. Carr refused to back compromise legislation that would have helped plan participants, but not the IBM participants he represents, because the changes would not have been retroactive.
"We were at a point where we could negotiate some changes in law, but when push came to shove, he didn't want any changes in law because it would affect his litigation," she said.