Cincinnati, OH, Mar. 5--District Judge Sandra Beckwith promised a quick decision Tuesday on a request by Formica Corp. retirees for an injunction preventing the laminate maker from continuing to reduce their monthly pension checks, according to the Cincinnati Enquirer.
During a two-hour hearing before a courtroom packed with retirees, their lawyer, Marc Mezibov, and Jack F. Fuchs, the lawyer for Formica, debated whether 300 retirees from the Evendale plant were entitled to relief from the company's decision to reduce their monthly checks because of errors - some dating back 18 years - in how the benefits were calculated.
In January, the company, which is emerging from Chapter 11 bankruptcy, told retirees that an auditor it hired found that 440 of the 624 retirees in its defined-benefit pension plan from 1985 to 1998 were receiving incorrect payments. The company says 295 were getting overpayments and 145 were being underpaid. Formica said the overpayments totaled $1 million and the underpayments about $500,000.
The company made lump sum payments, with interest, to those who were underpaid and began reducing the checks of those who were overpaid. The retirees hired Mezibov's firm to stop the cuts.
Fuchs, in asking Beckwith to dismiss the suit, argued that the company's pension plan administrators are required by the federal Employee Retirement Income Security Act of 1974 to make corrections when benefits are paid incorrectly.
"All that's happening here is that the plan is trying to comply with plan documents," Fuchs argued. "Complying with the law is not a breach of their fiduciary duty."
Mezibov argued that the retirees relied on the company's estimates of what they would receive in retirement in making the decision to give up their jobs.
While the company has outlined an administrative appeal process if the retirees dispute the benefit reduction, Mezibov said that could take months. "There's no question the retirees face irreparable harm if their benefits are cut," he said.
