EAST ST. LOUIS, Ill. — PricewaterhouseCoopers LLC might have been named earlier this year as one of the 100 best companies to work for by Fortune magazine, but its pension plan participants don't necessarily agree.
PwC and partners overseeing the pension and retirement plans have been hit with a class-action lawsuit alleging that they misused pension and retirement plans as tax shelters for well-heeled partners — at the expense of rank-and-file employees.
The suit was filed in federal district court in East St. Louis.
PwC's cash balance plan, with $1.4 billion in assets at the end of June 2003, and a 401(k) plan, with $1.6 billion in assets for the fiscal year ended Sept. 30, 2003, are at the heart of the suit. (A separate profit-sharing plan for partners is not affected.)
In amended documents filed on Jan. 28, the suit charges PwC and its partners with masterminding "a brazen, unlawful scheme … to game the tax and pension laws in order to improperly pad the partners' retirement benefits and take-home pay at the expense of both rank-and-file PwC employees and the public."
The suit, brought by Timothy D. Laurent, a former employee, alleges that the firm — for years synonymous with creative cash-balance pension plans — deliberately violated age- and income-discrimination provisions of federal pension law. By "engaging in multiple layers of deception," the suit alleges, PwC and its partners reduced "benefits to the paid rank-and-file employees down to the bare minimum thought need(ed) to keep the shelter afloat."
A ruling in favor of Mr. Laurent and other participants could cost the firm hundreds of millions of dollars.