In 1998 Cigna changed its pension plan to the disadvantage of its retirees. Employees and former employees filed suit, and the case has been dragging on ever since. From the time the suit was filed until today, approximately 1,000 of the retirees involved in the lawsuit have died. Now, finally, Cigna may pay what it owes its retirees later this year. A federal court has ordered Cigna to produce a list of all 27,000 former employees involved in the lawsuit and how much each of them is owned. Of course, once attorneys’ fees are deducted from the payout, employees will still not get the amount that they would have received had Cigna not taken its illegal action.
The courts first ruled against Cigna in 2008, but Cigna managed to drag the matter out until a few weeks ago. It remains to be seen if Cigna will comply with the court’s order. Cigna has a record of thumbing its nose at its legal obligations.
Originally, pensioners were promised a percentage of their final years’ salary based on years of service. Under the new plan, Cigna promised to contribute a percentage of the employees’ salary to the pension plan each year. At retirement, pensioners have a choice of taking the money in a lump sum or using it to buy an annuity.
Unsurprisingly, given Cigna’s reputation as an outlaw company, the information that Cigna provided its employees overstated the benefits of the change and concealed the fact that the new plan would result in lower benefits. Such pension plans were later outlawed, but Cigna believed that the new laws did not apply retroactively to it.
I do not back Bernie Sanders for the presidency of the United States, because I think his policies are too simple to be put into practice in a complex political environment. However, I do agree with him that avaricious managers such as those at Cigna should be stopped from taking advantage of their employees and customers.
On another subject, if you haven’t done so yet, please check out my ebook about hiking the Camion de Santiago de Compostela on Amazon. You can do so by clicking on the image of the book’s cover in the left sidebar. If you read it, an honest review on Amazon would be appreciated.