Stephens v. US Airways Group, Inc., No. 10-CV-7100, 2011 BL 185803 (D.C. Cir. July 25, 2011) The majority of a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit held that two retired US Airways pilots were entitled to receive interest for a 45-day delay in payment of their lump-sum pension benefits under the US Airways pension plan (Plan) and remanded for a calculation of such interest. The controlling opinion by Circuit Judge Janice Rogers Brown held that: (1) US Airways did not violate Section 204(c)(3) of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1054(c)(3), by failing to pay plaintiffs the "actuarial equivalent" of the annuity they would have received under the Plan as of the annuity start date; and (2) US Airways's 45-day payment delay was not "reasonable" in violation of 26 C.F.R. § 1.401(a)-20 Q & A-10(b)(3). Circuit Judge Brett Kavanaugh concurred only in the judgment, opining that plaintiffs were entitled to interest for the 45-day delay on payment of the lump sums because the failure to pay interest on the delay violated ERISA § 204(c)(3). Circuit Judge Karen LeCraft Henderson dissented, concluding that payment was "reasonably" delayed and plaintiffs were entitled to no interest.
Plaintiffs' Lump-Sum Benefits Distributed 45 Days Later Than Annuity Distribution Date
District Court Rejected Plaintiffs' Claims
Lump-Sum Payments Were Actuarially Equivalent, But 45-Day Delay Was Unreasonable
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