In 1998, employees and former employees of Cigna sued the Bloomfield, Conn.-based health insurer for changes to its pension plan. Now, the lawsuit is drawing to a close, according to the Hartford Courant.
The class-action lawsuit involves 27,000 individuals, approximately 2,000 to 2,500 of whom are still Cigna employees. The lawsuit took so long that 1,000 of those involved have died.
In the late 90s, Cigna made the switch from a pension plan to a cash balance plan, which promises employees a percentage of their salary with the assumption it will grow at a specific interest rate.
But Cigna "overstated the benefits" of its cash balance plan, "and concealed that [it] resulted in a net reduction in benefits," according to Paul Mollica, an employment lawyer with Outten & Golden. In other words, Cigna misleadingly outlined the benefits from the cash balance plan, and employees were not paid what they were owed.
Cigna now owes its employees the money they are owed from the initial pension, in addition to the lump sums the pensions were changed to, according to the report.
Cigna did not comment on the lawsuit, but after a court loss relating to the case in 2008, the health insurer said it continued "to believe that we treated all employees fairly and appropriately."