Free Response - District Court of Connecticut - Connecticut

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UNITED STATES DISTRICT COURT DISTRICT OF CONNECTICUT -----------------------------------------------------X : JANICE C. AMARA, GISELA : R. BRODERICK, ANNETTE S. GLANZ : individually, and on behalf of others : similarly situated, : : Plaintiffs, : v. : : CIGNA CORP. AND CIGNA : PENSION PLAN, : : Defendants. : : -----------------------------------------------------X

3:01 CV 2361 (MRK) Trial Dates: September 11-15, 2006 January 24-25, 2007

DEFENDANTS' RESPONSES AND OBJECTIONS TO PLAINTIFFS' PROPOSED POST-TRIAL FINDINGS OF FACT

Dated: June 25, 2007

MORGAN, LEWIS & BOCKIUS LLP Joseph J. Costello Jeremy P. Blumenfeld Jamie M. Kohen Admitted pro hac vice 1701 Market Street Philadelphia, Pennsylvania 19103-2921 (215) 963-5295/5258/5472 (215) 963-5001 (fax) ROBINSON & COLE James A. Wade (CT # 00086) 280 Trumbull Street Hartford, Connecticut 06103 (860) 275-8270 (860) 275-8299 (fax) Attorneys for Defendants CIGNA Corporation and CIGNA Pension Plan

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Defendants hereby respond to Plaintiffs' Proposed Post-trial Findings of Fact (dkt #248) in accordance with the numbered paragraphs set forth herein. Where facts are denied, some, but not necessarily all, of the grounds for the denial are stated herein. Further, where a finding of fact is not unqualifiedly admitted in its entirety, all of the facts within that finding of fact that are not explicitly admitted are denied. Defendants continue to assert the objections previously raised to any of the exhibits, deposition transcripts or other documents upon which Plaintiffs relied to provide the source for these proposed findings, and thereby incorporate herein their Objections to Plaintiffs' Proposed Trial Exhibit List (dkt #180). 1. Denied except as otherwise stated herein. Defendants deny the proposed

finding because it is based on inadmissible evidence, as the quoted article constitutes hearsay. The proposed finding is also irrelevant, as the opinions expressed in news articles or periodicals regarding cash balance plans have no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA has violated Section 204(g) of ERISA. Notwithstanding the foregoing, Defendants admit that the article Plaintiffs cite is accurately quoted, but is only a partial quote. Defendants further admit that traditional defined benefit plans in a non-union environment typically offer benefits based on a percentage of the employee's salary and the number of years of service.1 2. Defendants object to the proposed finding because it is based on

inadmissible evidence, as the quoted article constitutes hearsay. The proposed finding is also irrelevant, as the opinions expressed in news articles or periodicals regarding cash balance plans have no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD
1

Defendants further respond to proposed findings numbers 1-37 herein by directing the Court's attention to paragraphs 1-90, 180-81 of Defendants' Post-Trial Proposed Findings of Fact.

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and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA has violated Section 204(g) of ERISA. Notwithstanding the foregoing, Defendants admit that Plaintiff's description of a defined contribution plan is generally accurate. 3. Denied except as otherwise stated herein. Defendants deny the proposed

finding because it is based on inadmissible evidence. Specifically, the quoted article constitutes hearsay. The proposed finding is also irrelevant, as the opinions expressed in news articles or periodicals regarding cash balance plans have no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA has violated Section 204(g) of ERISA. 4. Defendants deny the proposed finding except admit that Plaintiffs accurately

cite Esden v. Bank of Boston, 229 F.3d 154, 158 (2d Cir. 2000), and quote, in part and with ellipses, the decision of the 7th Circuit in Berger v. Xerox Corp. Ret. Income Guarantee Plan, 338 F.3d 755, 758 (7th Cir. 2003). 5. Defendants deny the proposed finding because it is based on inadmissible

evidence. Specifically, the quoted documents constitute hearsay. Notwithstanding the foregoing, Defendants admit the statements in the second and third sentences of the paragraph. 6. Defendants deny the proposed finding because it is based on inadmissible

evidence. Specifically, the quoted article constitutes hearsay. Notwithstanding the foregoing, Defendants admit that Plaintiffs have described how cash balance plans frequently are designed, except that Defendants deny the statements in the last sentence of this paragraph. 7. Denied except as otherwise stated herein. Defendants deny the proposed

finding because it is based on inadmissible evidence. Specifically, the quoted article constitutes hearsay. The proposed finding is also irrelevant, as the opinions expressed in news articles or

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periodicals regarding cash balance plans have no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA has violated Section 204(g) of ERISA. Notwithstanding the foregoing, Defendants admit that the article Plaintiffs cite is accurately quoted, but is only a partial quote. 8. Denied except as otherwise stated herein. Defendants deny the proposed

finding because it is based on inadmissible evidence. Specifically, the quoted article constitutes hearsay. The proposed finding is also irrelevant, as the opinions expressed in news articles, periodicals, or other documents regarding cash balance plans have no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA has violated Section 204(g) of ERISA. Notwithstanding the foregoing, Defendants admit that the article Plaintiffs cite is accurately quoted, but is only a partial quote. 9. Denied except as otherwise stated herein. Defendants admit that a cash

balance account balance is the cumulative total of all of the components of the account, including any opening balance, pay and interest credits, and other transition credits. Defendants further admit that participants' accounts are not individually funded. 10. Denied except as otherwise stated herein. Defendants deny the proposed

finding because it is based on inadmissible evidence. Specifically, the quoted document constitutes hearsay. The proposed finding is also irrelevant, as there is no evidence that this document was ever provided to CIGNA and, even if it had been, advice CIGNA received when it was considering a cash balance conversion has no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's

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disclosure requirements, or whether CIGNA has violated Section 204(g) of ERISA. CIGNA's intent is not material to that analysis. Notwithstanding the foregoing, Defendants admit that the portion of this finding of fact that constitutes a quote accurately quotes the cited document, but is only a partial quote. 11. Denied except as otherwise stated herein. Defendants deny the proposed

finding because it is based on inadmissible evidence. Specifically, the quoted article constitutes hearsay. The proposed finding is also irrelevant, as the opinions expressed in news articles or periodicals regarding cash balance plans have no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA has violated Section 204(g) of ERISA. Furthermore, Defendants deny that Plaintiffs have accurately represented the content of this document or that it bears any relationship to the CIGNA Pension Plan. 12. Defendants deny the proposed finding because it is based on inadmissible

evidence. Specifically, the quoted report constitutes hearsay. The proposed finding is also irrelevant as the opinions expressed in the report, news articles or periodicals regarding cash balance plans have no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA has violated Section 204(g) of ERISA. Notwithstanding the foregoing, Defendants admit that the report Plaintiffs cite is accurately quoted, but is only a partial quote. Defendants further deny that this document bears any relationship to the CIGNA Pension Plan and that the methodology used by the GAO was reasonable or consistent with sound analysis. 13. Denied except as otherwise stated herein. Defendants admit that the

testimony Plaintiffs cite is accurately quoted, however Defendants deny the accuracy of

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Plaintiffs' characterization of the contents of the trial testimony. The proposed finding is also irrelevant, since Mr. Sher did not opine that he had personal knowledge concerning CIGNA's motivation for adopting a cash balance plan, and nevertheless, knowledge of the motivation of any employer's conversion to a cash balance formula has no bearing on whether a cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA has violated 204(g) of ERISA. 14. Denied except as otherwise stated herein. Defendants admit that the trial

testimony Plaintiffs cite is accurately described, but deny the proposed finding because it is based on inadmissible hearsay evidence. The proposed finding is also irrelevant, as the opinions expressed in the survey regarding the possibility of future additional cost or cost savings associated with cash balance plans have no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA has violated Section 204(g) of ERISA. Notwithstanding the foregoing,. 15. Denied except as otherwise stated herein. Defendants deny the proposed

finding because it is based on inadmissible evidence. Specifically, the June 1985 Kwasha Lipton Newsletter "Exciting New Retirement Concept: The Cash Balance Pension Plan" (Ex. 236) constitutes inadmissible hearsay and the Court ruled at trial that it was admitted for identification purposes only. Judge Kravitz Tr. 1384. The proposed finding is also irrelevant, as the opinions expressed in actuarial service promotional material from 1985 regarding cash balance plans have no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA has violated

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Section 204(g) of ERISA. Notwithstanding the foregoing, Defendants admit that the Newsletter Plaintiffs cite is accurately quoted. 16. Defendants deny the proposed finding except that Defendants admit that the

proposed finding partially describes some limited terms of the CIGNA Pension Plan before 1998, and does not completely describe how the plan worked in its entirety and how benefits were calculated. Defendants admit that New Formula participants were subject to the 1.67% formula and that other participants were subject to a 2% formula. 17. Defendants deny the proposed finding except that Defendants admit that the

proposed finding partially describes some limited terms of the CIGNA Pension Plan before 1998, and does not completely describe how the plan worked in its entirety and how benefits were calculated. Defendants admit that New Formula participants fell under the 1.67% formula. 18. Defendants admit that the proposed finding of fact generally describes some

terms of the CIGNA Pension Plan before 1998, but it does not completely describe how the plan worked in its entirety and how benefits were calculated. Defendants deny that all Tier 1 participants were entitled to the Preserved Spouse's Benefit. 19. 20. Admitted. Denied except as otherwise stated herein. Defendants admit that effective in

1998, CIGNA amended the CIGNA Pension Plan to a cash balance formula ("Part B") for many employees. Older and longer service employees, however, and former employees, remained in the traditional defined benefit plan ("Part A"). 21. Denied except as otherwise stated herein. Defendants admit that employees

under the Tier 1 formula with 45 or more age and service points were grandfathered and remained subject to CIGNA's traditional defined benefit formula. Defendants admit that other

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employees became subject to the cash balance formula. Participants who were not employees (e.g., former employees) were not subject to the cash balance formula unless and until they were rehired. 22. Defendants admit that the proposed finding of fact partially quotes from the

Part B plan document accurately. 23. Defendants deny the proposed finding because it is based on inadmissible

hearsay evidence. The cited report also is irrelevant, as the financial and funding status of the Plan has no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA has violated Section 204(g) of ERISA. Notwithstanding the foregoing, Defendants deny the proposed finding, as the report Plaintiffs cite aggregates all of "CIGNA's domestic and international pension obligations," and is not limited to the CIGNA Pension Plan at issue in this case. 24. Defendants deny the proposed finding because it is based on inadmissible

evidence. Specifically, the quoted document constitutes hearsay. The proposed finding is also irrelevant, as the advice CIGNA received when it was considering a cash balance conversion has no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA has violated Section 204(g) of ERISA. CIGNA's intent is not material to that analysis. Notwithstanding the foregoing, Defendants admit that the memo cited by Plaintiffs is quoted accurately, although only in part. 25. Admitted.

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26.

Denied except as otherwise stated herein. Defendants admit that Plaintiffs

cite Mr. Poulin's testimony accurately, although only in part and out of context, in that Mr. Poulin's discussion concerned wearaway, and did not discuss the distinctions in opening account balances as between younger and/or shorter service employees versus older and/or longer service employees, nor was there mention of the fact that any such subsidized early retirement benefits were protected by the terms of the Part B plan document. Defendants admit that the deposition testimony of Arko and Hodges cited by Plaintiffs is quoted accurately, although only in part. The initial retirement accounts established for younger and/or shorter service employees did not include the value of early retirement subsidies. The initial retirement accounts for older and/or longer service employees, i.e., those with 55 or more combined age and service points, however, did include some or all of the subsidized early retirement benefits to which the employee was entitled under the prior plan. Further, the subsidized early retirement benefits were protected by Section 7.3 of the Part B plan document. 27. Denied except as otherwise stated herein. Defendants admit that of the

factors in the calculation of initial retirement accounts was the Applicable Mortality Table, in accordance with the terms of Part B, Section 1.28. Further, Defendants admit that Plaintiffs cite Mr. Poulin's trial testimony accurately, although only in part and out of context. Mr. Poulin, in discussing his opinion as to the cause of wearaway, explained that any "pre-retirement mortality" discount would "depend[] on the mortality table," and without reference to the mortality table actually used by the CIGNA plan, stated summarily that "a 10 percent discount is a good approximation of that discount." Defendants admit that Plaintiffs cite Arko's deposition testimony accurately, although only in part.

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28.

Defendants admit that Plaintiffs have accurately set forth the benefit credit

schedule under Part B; however, Defendants object to Plaintiffs' characterization of such schedule as a "second generation" benefit credit schedule, as such a characterization is based on evidence which is inadmissible hearsay (see No. 8, supra). 29. 30. Admitted, except that Part B also has a maximum rate of 9%. Denied except as otherwise stated herein. Defendants deny the proposed

finding because it is irrelevant, as the issue of whether the cash balance conversion resulted in cost savings to CIGNA has no bearing on whether its cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA violated Section 204(g). Notwithstanding the foregoing, Defendants admit that the memorandum Plaintiffs cite is accurately quoted, but is only a partial quote. The cited memorandum, however, does not demonstrate or evidence that CIGNA expected to earn more on the plan's investments than the interest crediting rate. 31. Denied except as otherwise stated herein. Defendants admit that Plaintiffs

accurately cite Mr. Poulin's testimony insofar as he sets forth his opinion that cash balance plans are "analogous" to a variable annuity. Defendants admit that Section 1.1 generally defines the accrued benefit in terms of the account balance, subject to the terms of Section 1.1. Defendants deny the remaining statements or opinions in the finding of fact. 32. Defendants admit that Plaintiffs have accurately quoted from one portion of

the transcript, but deny that Plaintiffs' characterization of Mr. Sher's statements is accurate or complete. Mr. Sher did not agree that converting to a cash balance plan from a traditional defined benefit plan transfers the risk of interest rate fluctuations from employers to employees. See Tr. 1001.

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33.

Defendants admit that Plaintiffs have accurately quoted from one portion of

the transcript, but deny that Plaintiffs' characterization of Mr. Sher's testimony is accurate or complete. The Proposed Finding of Fact quotes one aspect of the transcript that is addressing a particular question about annuities. Specifically, Mr. Sher noted that the "dramatic impact" of interest rate fluctuations is simply "the nature of pension plans," whether traditional defined benefit plans or cash balance plans. Tr. 1119, line 24-1120, line 2. 34. 35. Denied. Denied except as otherwise stated herein. Defendants deny the proposed

finding because it is irrelevant, because whether or not CIGNA expected or realized cost savings in connection with the conversion to its cash balance formula has no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA has violated Section 204(g) of ERISA. Notwithstanding the foregoing, Defendants admit that Plaintiffs have accurately, but partially, quoted the cited documents. By way of further response, the exhibits cited in this proposed finding do not indicate the specific benefit credit and interest credit formula that was being considered at the time and that was the subject of the memos, nor does it address whether CIGNA expected current participants to suffer reductions in their future benefit accruals. 36. Denied except as otherwise stated herein. Defendants admit that Plaintiffs

requested additional documents but deny that Defendants resisted producing relevant documents, or that Defendants failed to produce any documents that the Court ordered CIGNA to produce. The Court simply inquired as to whether Defense counsel had received any additional documents from their clients "that bear on this cost savings issue from `97 to `98," to which Defense counsel replied no. Tr. 929.

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37.

Denied except as otherwise stated herein. Defendants deny the proposed

finding because it is irrelevant, because whether or not CIGNA expected cost savings in connection with the conversion to its cash balance formula has no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA has violated Section 204(g) of ERISA. Notwithstanding the foregoing, Defendants admit that the proposed finding accurately, but partially, quotes Mr. Poulin's trial testimony. The proposed finding omits the fact that Mr. Poulin did not prepare the documents to which he was referring, his response was premised on a hypothetical review of alternative 6A, and he stated clearly that one "would need to do an individual analysis for each person" to determine whether or not there was any savings resulting from the cash balance conversion. Poulin Tr. 1506. By way of further response, Defendants deny that there were generally expected to be cost savings as a result of the changes to its retirement program that were effective January 1, 1998. 38. Defendants admit that the finding of fact accurately quotes from part of

Judge Squatrito's Order describing what Plaintiffs allege.2 39. Defendants admit that the finding of fact accurately quotes from part of

Judge Squatrito's Order describing what Plaintiffs allege. 40. Denied except as otherwise stated herein. Defendants admit that the

proposed finding accurately, but partially, cites to the pages of Mr. Poulin's trial testimony in which he described the scope of his report and he adopted his reports/declarations as testimony at trial. Defendants admit that Mr. Poulin's expert report draws the conclusions described in the proposed finding, but deny the accuracy or legal sufficiency of his conclusions and deny that Mr.
2

Defendants further respond to proposed findings numbers 38 - 123 herein by directing the Court's attention to paragraphs 151-172 of Defendants' Post-Trial Proposed Findings of Fact.

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Poulin used proper methodology, as documented in Defendants' expert report. Defendants deny that any participants lost any part of their previously-earned benefits. Ex. 1, Part B, Sections 1.1, 1.32, 7.3. 41. Denied except as otherwise stated herein. Defendants admit that Plaintiffs

have accurately quoted Mr. Poulin's testimony, but deny the accuracy or legal sufficiency of Mr. Poulin's conclusions and deny that Mr. Poulin used proper methodology, as documented in Defendants' expert report. Defendants deny that any participants lost any part of their previously-earned benefits. Ex. 1, Part B, Sections 1.1, 1.32, 7.3. 42. Denied except as otherwise stated herein. Defendants admit that Mr.

Poulin's expert report draws the conclusions described in the proposed finding and that Plaintiffs have accurately quoted Mr. Poulin's testimony, but deny the accuracy or legal sufficiency of his conclusions and deny that Mr. Poulin used proper methodology, as documented in Defendants' expert report. Furthermore, Defendants deny the accuracy and legal sufficiency of the conclusion drawn by Plaintiffs from such report. Defendants deny that any participants lost any part of their previously-earned benefits. Ex. 1, Part B, Sections 1.1, 1.32, 7.3. 43. Denied except as otherwise stated herein. Defendants admit that the Mr.

Poulin testimony cited by Plaintiffs is quoted accurately, that Mr. Poulin's expert report draws the conclusions described in the proposed finding, and that Plaintiffs have accurately quoted Mr. Poulin's testimony, but deny the accuracy or legal sufficiency of his conclusions and deny that Mr. Poulin used proper methodology, as documented in Defendants' expert report. Defendants deny that any participants lost any part of their previously-earned benefits. Ex. 1, Part B, Sections 1.1, 1.32, 7.3.

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44.

Denied except as otherwise stated herein. Defendants admit that Mr.

Poulin's expert report draws the conclusions described in the proposed finding and that Plaintiffs have accurately quoted Mr. Poulin's testimony, but deny the accuracy or legal sufficiency of his conclusions and deny that Mr. Poulin used proper methodology, as documented in Defendants' expert report. Defendants deny that any participants lost any part of their previously-earned benefits. Ex. 1, Part B, Sections 1.1, 1.32, 7.3. 45. Denied except as otherwise stated herein. Defendants admit that Mr.

Poulin's expert report draws the conclusions described in the proposed finding, but deny the accuracy or legal sufficiency of his conclusions and deny that Mr. Poulin used proper methodology, as documented in Defendants' expert report. Defendants admit that Mr. Poulin's trial testimony is accurately cited, although in part. Defendants deny that any participants lost any part of their previously-earned benefits. Ex. 1, Part B, Sections 1.1, 1.32, 7.3. 46. Denied. This proposed finding of fact is misleading and does not accurately

describe the various factors that interact to create a potential wear-away effect. Moreover, Defendants deny that a wear-away period makes the cash balance accruals "illusory." Moreover, Plaintiff Ms. Amara currently is receiving benefits in accordance with the Part A formula, not Part B's cash balance formula. 47. Denied except as otherwise stated herein. Defendants admit that Ms. Amara

earned a subsidized early retirement benefit with a social security supplement under the Tier 1 formula starting at age 55, to be reduced pursuant to the Social Security offset once Ms. Amara reached age 65. Defendants deny that Ms. Amara earned a level benefit of $1,833.65 per month starting at age 55 under the prior plan.

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48.

Defendants admit that Mr. Poulin's expert report draws the conclusions

described in the proposed finding, but deny the accuracy or legal sufficiency of his conclusions and deny that Mr. Poulin used proper methodology, as documented in Defendants' expert report. Defendants deny that any participants lost any part of their previously-earned benefits. Ex. 1, Part B, Sections 1.1, 1.32, 7.3. By way of further response, regardless of her account balance, Ms. Amara always was entitled to a benefit under Part B at least as valuable as her age-55 subsidized early retirement benefit under Part A. Ex. 1, Part B, Section 7.3. 49. Denied except as otherwise stated herein. Defendants admit that Mr.

Poulin's expert report draws the conclusions described in the proposed finding, but deny the accuracy or legal sufficiency of his conclusions and deny that Mr. Poulin used proper methodology, as documented in Defendants' expert report. Defendants deny that any participants lost any part of their previously-earned benefits. Ex. 1, Part B, Sections 1.1, 1.32, 7.3. Further, this finding of fact is denied. Ms. Amara continued to accrue benefits to her age-65 normal retirement benefit and to her benefits if she elected to receive them in a lump sum. 50. Denied except as otherwise stated herein. Defendants admit that Mr.

Poulin's expert report draws the conclusions described in the proposed finding, but deny the accuracy or legal sufficiency of his conclusions and deny that Mr. Poulin used proper methodology, as documented in Defendants' expert report. Defendants deny that any participants lost any part of their previously-earned benefits. Ex. 1, Part B, Sections 1.1, 1.32, 7.3. Further, this finding of fact is denied. Ms. Amara continued to accrue benefits to her age65 normal retirement benefit and to her benefits if she elected to receive them in a lump sum. 51. Denied except as otherwise stated herein. Defendants admit that the

testimony Plaintiffs cite in the proposed finding is accurately quoted but object on the ground

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that the quoted statement constitutes inadmissible hearsay. Moreover, Ms. Amara's awareness of any wear-way effect under Part B is irrelevant, since Ms. Amara is currently receiving benefits in accordance with the Part A formula. 52. Denied except as otherwise stated herein. Defendants admit that Mr. Poulin

made the determinations described in the proposed finding, but deny the accuracy or legal sufficiency of his determinations and deny that Mr. Poulin used proper methodology, as documented in Defendants' expert report. Defendants deny that any participants lost any part of their previously-earned benefits. Ex. 1, Part B, Sections 1.1, 1.32, 7.3. Further, Ms. Amara continued to accrue benefits to her age-65 normal retirement benefit and to her benefits if she elected to receive them in a lump sum. Moreover, Defendants object to the relevance of this proposed finding since Ms. Amara was placed back into Part A and is receiving benefits in accordance with the old plan. 53. Denied except as otherwise stated herein. Defendants admit that Mr.

Poulin's expert report draws the conclusions described in the proposed finding and that Plaintiffs have accurately quoted Mr. Poulin's testimony, but deny the accuracy or legal sufficiency of his conclusions and deny that Mr. Poulin used proper methodology, as documented in Defendants' expert report. Defendants deny that any participants lost any part of their previously-earned benefits. Ex. 1, Part B, Sections 1.1, 1.32, 7.3. Further, Ms. Broderick continued to accrue benefits to her age-65 normal retirement benefit and to her benefits if she elected to receive them in a lump sum. 54. Denied except as otherwise stated herein. Defendants admit Plaintiffs have

accurately quoted Mr. Poulin's testimony, but deny the accuracy or legal sufficiency of his conclusions and deny that Mr. Poulin used proper methodology, as documented in Defendants'

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expert report. Plaintiffs are purporting to compare Ms. Broderick's subsidized early retirement benefit (with the social security supplement) to her account balance that has based on her age-65 normal retirement benefit under the prior formula. Defendants deny that any participants lost any part of their previously-earned benefits. Ex. 1, Part B, Sections 1.1, 1.32, 7.3. Further, Ms. Broderick continued to accrue benefits to her age-65 normal retirement benefit and to her benefits if she elected to receive them in a lump sum. Defendants deny that Ms. Broderick's benefit and interest credits were not credited to her account. 55. Denied except as otherwise stated herein. Defendants admit that Mr.

Poulin's supplemental expert report draws the conclusions described in the proposed finding of fact and that Plaintiffs cite his trial testimony accurately, although in part. However, Defendants deny the accuracy or legal sufficiency of Poulin's conclusions, and deny that Mr. Poulin used proper methodology with regard to his analysis of Ms. Broderick's benefits, and it is, therefore, misleading, as documented in Defendants' expert report. Plaintiffs are purporting to compare Ms. Broderick's subsidized early retirement benefit (with social security supplement) to her account balance that was based on her age-65 normal retirement benefit under the prior formula. Defendants deny that any participants lost any part of their previously-earned benefits. Ex. 1, Part B, Sections 1.1, 1.32, 7.3. 56. Denied except as otherwise stated herein. Defendants admit that the

testimony Plaintiffs cite in the proposed finding is accurately quoted, but deny that Ms. Broderick was working until the end of 2001 without accruing additional cash balance benefits. Ms. Broderick continued to accrue benefits to her age-65 normal retirement benefit and to her benefits if she elected to receive them in a lump sum.

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57.

Denied except as otherwise stated herein. Defendants admit that the

testimony Plaintiffs cite in the proposed finding is accurately quoted, but deny that the facts stated are correct. Ms. Broderick continued to accrue benefits to her age-65 normal retirement benefit and to her benefits if she elected to receive them in a lump sum. 58. Denied. Moreover, Defendants deny that Ms. Flannery had zero accruals,

since she continued to accrue benefits to her age-65 normal retirement benefit and to her benefits if she elected to receive them in a lump sum. The documents cited do not confirm the factual statements claimed. 59. Denied except as otherwise stated herein. Defendants admit that the

testimony Plaintiffs cite in the proposed finding is accurately quoted, but it omits that Defendants explained that the Court's question likely related "to whether there's an early retirement subsidy in the minimum benefit that wouldn't be part of the normal retirement benefit." Tr. 922. Moreover, Defendants deny the proposed finding because the testimony of Larry Mr. Sher addressed Ms. Flannery's circumstances. 60. Denied except as otherwise stated herein. Defendants admit that Mr. Poulin's

expert report draws the conclusions described in the proposed finding and that his trial testimony is accurately cited with regard to his assertion that certain cash balance accruals become "lost" and are never recouped, but deny the accuracy or legal sufficiency of his conclusions and deny that Mr. Poulin used proper methodology, as documented in Defendants' expert report. Further, this finding of fact is denied because participants continued to accrue benefits to their age-65 normal retirement benefit and to their benefits in the form of a lump sum. There are no "lost accruals." 61. Admitted.

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62.

Denied except as otherwise stated herein. Defendants admit that the

testimony Plaintiffs cite in the proposed finding is accurately cited, but deny that the facts stated are correct. Mr. Sher also testified that if interest rates had remained the same, Ms. Glanz would not have experienced a wear-away with regard to her lump sum benefit. DFF ¶ 277. 63. Denied except as otherwise stated herein. Defendants admit that the

testimony Plaintiffs cite in the proposed finding is accurately quoted but deny that the facts stated are correct. Ms. Glanz continued to accrue benefits to her age-65 normal retirement benefit and to her benefits in the form of a lump sum. 64. Denied except as otherwise stated herein. Defendants admit that Mr. Poulin's

expert report draws the conclusions described in the proposed finding, but deny the accuracy or legal sufficiency of his conclusions and deny that Mr. Poulin used proper methodology, as documented in Defendants' expert report. Further, this finding of fact is denied. Participants frequently continued to accrue benefits to their age-65 normal retirement benefit and continued to accrue benefits to their benefits in the form of a lump sum. 65. Denied except as otherwise stated herein. Defendants admit that Plaintiffs

have accurately quoted Mr. Poulin's testimony, but deny the accuracy or legal sufficiency of his conclusions and deny that Mr. Poulin used proper methodology, as documented in Defendants' expert report. Mr. Poulin did not conduct any analyses as to the number of participants who experienced wear-away, and accordingly his conclusion is not entitled to any deference. Moreover, Defendants deny that any participants lost any part of their previously-earned benefits. Ex. 1, Part B, Sections 1.1, 1.32, 7.3. 66. Denied except as otherwise stated herein. Defendants do not maintain the

information requested, and this Court has never ordered Defendants to produce such information.

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Defendants admit that Prudential Retirement is the record-keeper for the CIGNA Pension Plan but it likewise does not maintain electronic data showing how many participants had benefits in excess of their cash balance accounts in any given year. 67. Denied except as otherwise stated herein. Defendants admit that Mr. Poulin's

expert report draws the conclusions which are described in the finding of fact and that Mr. Poulin's trial testimony is accurately cited by Plainitiffs, but Defendants deny the accuracy or legal sufficiency of his conclusions and deny that Mr. Poulin used proper methodology, as documented in Defendants' expert report. Defendants admit that certain older, longer service participants (i.e., those with 55 or more combined age and service points) had their prior benefits converted to an Initial Retirement Account using a more favorable 5.05% interest rate. 68. Denied except as otherwise stated herein. Defendants admit Plaintiffs have

accurately cited Mr. Sher's testimony, though only in part and taken out of context. By way of further response, Mr. Sher testified that it "doesn't matter what the benefit formula per se is when looking at this phenomenon; what matters is the general level of benefits, however they're expressed. And the higher they are [or] relatively lower that they are, the more likely you are going to have this type of [wearaway] effect." Tr. at 1348. Moreover, Defendants deny that the wear-away effect was illegal or that it could have been foreseen. 69. 70. Admitted. Denied except as otherwise stated herein. Defendants admit that early

retirement subsidized benefits are more valuable than normal retirement benefits. Because opening account balances are generally based on the value of a participant's normal retirement benefit (except for certain older employees, whose opening account balance is enhanced to include the value of some early retirement benefits), wear-away with respect to early retirement

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benefits is more likely than wear-away with respect to normal retirement benefits. Wear-away with respect to early retirement benefits, however, is irrelevant to ERISA's nonforfeitability rule and ERISA's benefit accrual rule. 71. Denied except as otherwise stated herein. Defendants admit that the

testimony Plaintiffs cite in the proposed finding is accurately quoted, but deny the accuracy or legal sufficiency of his conclusions. Depending upon how interest rates changed (or ceased to change) after the conversion, participants may have experienced no wear-away at all, or at least no wear-away as to their lump sum benefit, as Mr. Sher's testimony and expert reports reflected. Moreover, Mr. Poulin did not do any analyses concerning the number of participants who were eligible for a subsidized early retirement benefit or for the Free 30 benefit. Additionally, all CIGNA employees who either were grandfathered in Part A, or became Part B participants with a zero opening account balance would experience no wear-away. 72. Denied except as otherwise stated herein. Defendants admit that the

testimony Plaintiffs cite in the proposed finding is accurately quoted, though only in part and taken out of context. However, Defendants deny Plaintiffs' misleading characterization of Mr. Sher's testimony, in that he did not simply acknowledge or admit that "the wearaways could be predicted." By way of further response, Mr. Sher clarified that it would be difficult to predict any wearaway effect and that it is hard to account for unpredictable future interest rate changes when attempting to do so. Tr. 1029. 73. Denied except as otherwise stated herein. Defendants deny the proposed

finding as irrelevant, as "typical" analyses regarding cash balance plans for companies other than CIGNA have no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether

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CIGNA has violated Section 204(g) of ERISA. Moreover, Plaintiffs lack any evidence regarding whether or not, or to what extent, CIGNA anticipated that participants would experience a wearaway effect upon conversion. Notwithstanding the foregoing, Defendants admit that the transcript testimony Plaintiffs cite is accurately quoted, but that they are only a partial quotes. 74. Denied except as otherwise stated herein. Defendants deny the proposed

finding because it is based on inadmissible evidence. Specifically, the quoted report and survey constitute hearsay. The proposed finding is also irrelevant, as the opinions expressed in news articles or periodicals regarding cash balance plans have no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA has violated Section 204(g) of ERISA. Nevertheless, Defendants admit that where the benefits under the prior plan formula and a new cash balance formula are maintained as two separate benefits, there is no wear-away and participants generally cannot elect to receive their prior benefits in the form of a lump sum (unless the prior plan also offered lump sum benefits). 75. Denied except as otherwise stated herein. Defendants admit Plaintiffs have

accurately quoted Mr. Poulin's testimony, although in part. The proposed finding is also irrelevant, as the opinions expressed regarding other companies' cash balance plans have no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA has violated Section 204(g) of ERISA. 76. Denied except as otherwise stated herein. Defendants deny the proposed

finding because it is based on inadmissible evidence. Specifically, the quoted survey constitutes hearsay. The proposed finding is also irrelevant, as the opinions or results expressed in surveys

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regarding cash balance plans have no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA has violated Section 204(g) of ERISA. Moreover, Defendants deny that participants' cash balance pensions "do not grow" during a wear-away period, since participants are continuing to accumulate benefit and interest credits. Notwithstanding the foregoing, Defendants admit that the survey Plaintiffs cite is accurately quoted, but is only a partial quote. 77. Defendants admit that Tier 1 rehires after 2000 did not have their previously-

earned benefits converted into an opening account balance. Instead, these rehired employees earned benefits under the cash balance formula starting with an account balance of zero, but they retained the rights to their previously-earned benefits under the prior plan formula. 78. Defendants admit only that the Pension Protection Act subjects plan

conversions occurring after June 29, 2005 to particular requirements different from the "A+B" approach advocated by Plaintiffs here. The details of those requirements are set forth in the statute, 29 U.S.C. § 1054(b)(5)(B)(iii), as amended. 79. Denied except as otherwise stated herein. Mr. Sher's analysis only purported

to show that an "A + B" Age 65 Benefit would be less beneficial for Ms. Hogan and Mr. Curlee than the Plan's greater of "A or B" approach under specific defined circumstances and given certain assumptions regarding interest rate fluctuations. 80. Denied as stated. Defendants deny that CIGNA did not produce an

electronic spreadsheet with Mr. Sher's calculations. To the contrary, the spreadsheet was produced, as Plaintiffs' counsel admitted at trial. Defendants admit that some of Mr. Sher's calculations were performed using macros for calculating annuities that expedite the annuity

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calculation process. Defendants also deny that it was established that Mr. Sher miscalculated the "A + B" benefits for Ms. Hogan and Mr. Curlee. Even Mr. Poulin admitted that the opening balance approach (greater of A or B) produced a greater benefit than the A+B approach for participants converted on January 1, 1998 with more than 55 age and service points, like Mr. Curley and Ms. Hogan. 81. Defendants admit the finding of fact accurately quotes Defendants'

interrogatory responses. 82. Denied except as otherwise stated herein. While Plaintiffs have accurately

quoted Mr. Hodges' testimony in part, Mr. Hodges only testified that dropping interest rates "could give rise to a wearaway period," and he did not state that he believed prior to conversion that a wear-away period necessarily would result. Mr. Hodges further explained that "the duration of the wearaway period [is] highly contingent upon some of the variables" such as "[e]arly retirement utilization, compensation patterns subsequent to the conversion event, and continued employment at CIGNA Corporation." Ex. 241 (emphasis added) 83. Denied except as otherwise stated herein. While Plaintiffs have accurately

cited Mr. Hodges' testimony in part, Mr. Hodges did not testify that he was aware before the conversion that wear-away periods would necessarily exist, or what the length of wear-away periods might be. Mr. Hodges testified only that based on his current knowledge he "speculat[ed]" that in some rehire situations, the wearaway "may be on the order of four, five, or six years." Ex. 241. 84. 85. Admitted. Denied except as otherwise stated herein. The proposed finding of fact is

irrelevant, as the alleged opinions expressed by unnamed, rehired plan participants regarding the

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fact that they did not read their SPDs upon rehire or ask the right questions, has no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA has violated Section 204(g) of ERISA. Notwithstanding the foregoing, Defendants admit that the deposition transcript Plaintiffs cite is accurately quoted, but is only a partial quote. 86. Defendants deny the proposed finding because it is irrelevant, misleading, as

it reflects nothing more than CIGNA's internal deliberations, presented through an incomplete quote, regarding the existence of the "wear-away" issue. Most significantly, this memorandum from 2002 casts no light on whether prior to the conversion CIGNA anticipated the wear-away effect that would up occurring due to falling interest rates. These deliberations have no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA violated Section 204(g). Notwithstanding the foregoing, Defendants admit that the memorandum Plaintiffs cite is accurately quoted, but is only a partial quote. 87. Defendants deny the proposed finding because it is irrelevant, misleading, as

it reflects nothing more than CIGNA's internal deliberations, presented through an incomplete quote, regarding the existence of the "wear-away" issue. Defendants deny that all long-service employees experience a wear-away effect due to a subsidized early retirement benefit. Defendants further deny that during a wear-away period participants are not earning any benefit since participants continue to earn benefit and interest credits and their lump sum continues to grow. These deliberations have no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA violated Section 204(g). Notwithstanding the foregoing,

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Defendants admit that the memorandum Plaintiffs cite is accurately quoted, but is only a partial quote. 88. Defendants deny the proposed finding because it is irrelevant, misleading

and based on inadmissible hearsay. The notes cited are not authored and do not reflect who said what to whom. Ms. Bergman did not testify at trial and any statements made to her, as well as the notes themselves have no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA violated Section 204(g). Moreover, Defendants deny that Ms. Bergman lost any part of her previously-earned benefits. 89. Defendants deny the proposed finding because it is irrelevant and

misleading. Defendants deny that there was a period in which Mr. Lamb's lump sum benefit was not increasing. Notwithstanding the foregoing, Defendants admit that the letter Plaintiffs cite is accurately quoted, but is only a partial quote. The letter is referring to early retirement benefits, as is made clear from the paragraphs above the one quoted in the finding of fact. Moreover, Defendants deny that Mr. Lamb lost any part of his previously-earned benefits. 90. Defendants deny the proposed finding because it is irrelevant, misleading

and based on inadmissible hearsay. The notes cited are not authored and do not reflect who said what to whom. Mr. Andruszkiewicz did not testify at trial and any statements made to him, as well as these notes have no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA violated Section 204(g). Notwithstanding the foregoing, Defendants admit that the notes Plaintiffs quote are accurately quoted, but is only a partial quote. 91. Admitted.

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92.

Denied except as otherwise stated herein. Defendants admit that

Ms. Amara's subsidized early retirement benefit exceeded the value of her account balance at age 55. Ms. Amara's age-65 normal retirement benefit and lump sum benefit, however, continued to earn additional benefits and grow. 93. Denied except as otherwise stated herein. Defendants deny the proposed

finding because it is irrelevant and misleading. These statements have no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA violated Section 204(g). Furthermore, to the extent that Plaintiffs misrepresentations based on that portion of the exhibit containing an article from the Wall Street Journal, Defendants deny that portion of the proposed finding as based on inadmissible hearsay. Furthermore, Defendants deny the proposed finding to the extent it suggests that CIGNA deliberately established opening balances below the real value of employee's previously-earned benefits. To the contrary, opening balances (Initial Retirement Accounts) were based on the value of employee's normal retirement benefits (or subsidized early retirement benefits for older employees) as of the date of the cash balance conversion using interest rates applicable at the time. Notwithstanding the foregoing, Defendants admit that the finding of fact accurately quotes the cited document. 94. Denied except as otherwise stated herein. Defendants deny the proposed

finding because it is irrelevant, misleading, as it reflects nothing more than CIGNA's internal deliberations, presented through an incomplete quote, regarding the existence of "wear-away." These deliberations have no bearing on whether CIGNA anticipated a wear-away effect before the conversion or whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA violated

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Section 204(g). Notwithstanding the foregoing, Defendants admit that the documents Plaintiffs cite (Exs. 47 and 49) are accurately quoted but is only a partial quote. Furthermore, Exhibit 47 does not purport to be a final document presented to the CIGNA Board of Directors, but rather was a draft sent for comments. Plaintiffs' characterization of the document is misleading and inaccurate. 95. Denied except as otherwise stated herein. Defendants deny the proposed

finding because it is irrelevant, misleading, as it reflects nothing more than CIGNA's deliberations, presented through an incomplete quote, regarding the existence of a wear-away and its legality. These deliberations have no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA violated Section 204(g). Furthermore, the testing for compliance with ERISA's accrual rules was conducted before December 31, 1997, the date referenced in the 30(b)(6) Notice of Deposition. CIGNA received guidance regarding its plan design from Mercer and from its outside counsel. 96. Defendants deny the proposed finding because it is based on inadmissible

evidence. Specifically, the quoted witness statement constitutes hearsay. Further, Defendants deny the proposed finding because it is irrelevant and misleading, as it reflects nothing more than Mercer's analyses. Moreover, the materials cited in no way reflect that prior to the conversion CIGNA anticipated a wear-away effect. 97. Denied except as otherwise stated herein. Defendants deny the proposed

finding because it is based on inadmissible evidence. Specifically, the quoted memo constitutes hearsay. The proposed finding also is irrelevant, as the discussion and advice contained therein regarding benefit accrual tests, as well as CIGNA's intent upon conversion, have no bearing on

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whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA has violated Section 204(g) of ERISA. Notwithstanding the foregoing, Defendants admit that Plaintiffs have accurately quote from one portion of the memo, but deny that Plaintiffs' characterization of the memo is accurate. Plaintiffs are taking a quote from one aspect of the memo that is addressing a particular question about "social security wage overrides" out of context. The portion of the memo does not address any of ERISA's accrual rules or indicate that CIGNA was entirely unconcerned with accrual rules. 98. Denied except as otherwise stated herein. Defendants admit Plaintiffs have

accurately quoted portions of Mr. Sher's testimony, but deny Plaintiffs' characterization of Mr. Sher's testimony. The proposed finding does not explain to what it is comparing the "greater of" approach. By way of further response, Mr. Sher testified that "after a period of time, [] the present accrued benefit . . . would wearaway" and an opening account balance is only "one aspect" contributing to wearaway. Tr. 1338 -39. 99. Defendants admit the finding of fact accurately quotes Mr. Sher's testimony.

However, Mr. Sher also testified to the various factors and conditions that may potentially contribute to a wear-away effect. 100. Defendants admit the finding of fact accurately quotes Mr. Sher's testimony

but deny Plaintiffs' characterization of Mr. Sher's statements as unprompted and extended. 101. Denied except as otherwise stated herein. Defendants admit that the

Application for Determination is accurately described. Defendants further admit that Mr. Poulin's trial testimony draws the conclusions described in the proposed finding, but deny the accuracy or legal sufficiency of his conclusions and deny that Mr. Poulin used proper

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methodology, as documented in Defendants' expert report. Moreover, the proposed finding inappropriately presents a legal conclusion. Defendants deny that Part B of CIGNA's Plan cannot satisfy ERISA's 133 % accrual rule. 102. Denied except as otherwise stated herein. Defendants admit only that

Plaintiffs have accurately represented the financial numbers contained in the cited exhibits. Defendants deny the accuracy and legal sufficiency of conclusions drawn by Plaintiffs based on such data. Defendants deny that the benefit and interest credits added to participants' accounts provided no additional value to their lump sum retirement benefit. By way of further response, the proposed finding is irrelevant as it has no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA violated Section 204(g). Plaintiffs are trying to compare benefits in a manner that is irrelevant under ERISA's statutory provisions. 103. Denied. The documents cited in Plaintiffs' paragraph 58 do not confirm the

factual statements claimed. By way of further response, the proposed finding is irrelevant as it has no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA violated Section 204(g). Plaintiffs are trying to compare benefits in a manner that is irrelevant under ERISA's statutory provisions. ERISA's 133% accrual rule requires that the previously-earned benefits be ignored when testing for compliance with this rule. 104. Denied except as otherwise stated herein. Defendants admit that Mr.

Poulin's expert report draws the conclusions described in the proposed finding, but deny the accuracy or legal sufficiency of his conclusions and deny that Mr. Poulin used proper methodology, as documented in Defendants' expert report. This finding of fact also is irrelevant,

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as it purports to consider previously-earned benefits under a prior formula. ERISA's 133% accrual rule requires that the previously-earned benefits be ignored when testing for compliance with this rule. 105. Denied except as otherwise stated herein. Defendants admit that Mr. Poulin's

trial testimony draws the conclusions described in the proposed finding, but deny the accuracy or legal sufficiency of his conclusions and deny that Mr. Poulin used proper methodology, as documented in Defendants' expert report. Moreover, the proposed finding does not specify to what it is comparing Ms. Glanz's wear-away period. 106. Denied except as otherwise stated herein. Defendants admit that Mr. Sher's

handwritten notes reflect Ms. Glanz's accruals and that the citations to Mr. Sher's trial testimony are accurately cited, although only in part. However, Defendants deny Plaintiffs' characterization of Mr. Sher's testimony as it relates to Ms. Glanz's annuity value from 2001 to 2002 in that Mr. Sher did not state that there would have been no accrual in 2002. This finding of fact also is irrelevant, as it purports to consider previously-earned benefits under a prior formula. ERISA's 133% accrual rule requires that these previously-earned benefits be ignored when testing for compliance with this rule. 107. Denied except as otherwise stated. Defendants admit that Mr. Poulin's trial

testimony is accurately quoted, although only in part. Further, Defendants admit that Mr. Poulin's trial testimony and expert report draw the conclusions described in the proposed finding, but deny the accuracy or legal sufficiency of his conclusions and deny that Mr. Poulin used proper methodology, as documented in Defendants' expert report. This finding of fact also is irrelevant, as it purports to consider previously-earned benefits under a prior formula.

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ERISA's 133% accrual rule requires that these previously-earned benefits be ignored when testing for compliance with this rule. 108. Denied. Although Mr. Sher did opine in his report and testimony that the

133% accrual rule can be conducted without reference to the previously-earned benefits (as is common practice whenever a plan amendment causes wearaway), other aspects of his report also address this issue, including his discussion and analysis of how benefits are earned under Part B. 109. Denied except as otherwise stated herein. Defendants admit that Plaintiffs

have accurately quoted Mr. Sher's testimony, but deny this finding of fact as taken out of context and misleading. Mr. Sher was referring to Mr. Poulin's interpretation of the 133% accrual rule when he testified "if that were the way the test were to be applied, there would be many, many situations in practice that would have a problem." Tr. 1045 (emphasis added). As Plaintiffs note, Mr. Sher went on to explain that because the test is not applied that way, wearaway had "never been considered to be problematic or raised as problems by the government." Id. 110. Denied. Defendants deny the proposed finding as irrelevant, because it does

not address a plan amendment that changes a plan from one benefit formula to another benefit formula. Rather, the Treasury Department was examining the instance where a plan has two simultaneous benefit formulas, a situation not present in this case. 111. Denied. Defendants deny the proposed finding because it is based on

inadmissible evidence. Specifically, the cited audio tape transcript constitutes hearsay. The proposed finding is also irrelevant, as the opinions expressed by unidentified purported "IRS officials" at a seminar regarding cash balance plans are not entitled to any deference and have no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA has violated

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Section 204(g) of ERISA. ERISA's 133% accrual rule requires that "any amendment to the plan which is in effect for the current year shall be treated as if in effect for all other plan years." 29 U.S.C. § 1054(b)(1)(B). This has been confirmed by at least two cases. See Richards v. FleetBoston Fin. Corp., 427 F.Supp.2d 150, 168-70 (D. Conn. 2006); Register v. PNC Fin. Servs., Group, 477 F.3d 56, 70-72 (3d Cir. 2007). 112. Denied except as otherwise stated herein. Defendants deny the proposed

finding as irrelevant, as Mr. Sher's recollection of the IRS' approach to plans transitioning benefit formulas, and informal statements by IRS officials which are not entitled to any deference, have no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA has violated Section 204(g) of ERISA. Notwithstanding the foregoing, Defendants admit that Plaintiffs have accurately quoted Mr. Sher's testimony, but is only a partial quote. 113. Denied. Defendants deny the proposed finding because it is based on

inadmissible evidence. Specifically, the American Benefits Council comments constitute hearsay. The proposed finding is also irrelevant, as the opinions expressed by unidentified Council members have no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA has violated Section 204(g) of ERISA. Notwithstanding the foregoing, Defendants admit that Plaintiffs have accurately quoted the Council's comments, although they are taken out of context. 114. Denied. Defendants deny the proposed finding because it is based on

inadmissible evidence. Specifically, the ERISA Industry Committee comments constitute hearsay. The proposed finding is also irrelevant, as the opinions expressed by unidentified

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Committee members have no bearing on whether CIGNA's cash balance plan violates ERISA, whether CIGNA's SPD and Section 204(h) notice satisfy ERISA's disclosure requirements, or whether CIGNA has violated Section 204(g) of ERISA. Notwithstanding the foregoing, Defendants admit that Plaintiffs have accurately quoted the Committee's comments, although they are taken out of context. 115. 116. Defendants admit the finding of fact accurately quotes Mr. Sher's testimony. Denied except as otherwise stated herein. Defendants admit that Plaintiffs

have accurately cited Mr