A federal judge on Monday dismissed a suit by Verizon Communications Inc. management retirees contesting the company's decision to purchase a group annuity contract from Prudential Insurance Co. of America.
U.S. District Court Judge Sidney Fitzwater in Dallas ruled the class of about 41,000 retirees who were affected by the transaction could file an amended complaint within the next 30 days.
Verizon spokesman Raymond McConville said Verizon is “pleased with the court's decision.”
Mr. Fitzwater in March allowed the lawsuit to proceed to decide whether the transaction violated ERISA Section 404(a), whether the plan's summary plan description satisfied the requirement to disclose the circumstances that might result in a loss or reduction of benefits, and whether the transaction violated ERISA's non-discrimination provision.
“Because the … class has not alleged that the (summary plan description) lacked any description that (it) was required to include, the court dismisses the … claim,” Mr. Fitzwater said in his ruling. The judge also said execution of the annuity contract was not a “fiduciary function” and that the court cannot “reasonably infer” that the $1 billion premium payment to execute the deal was “unreasonable.”