Opinion ID: 770714
Heading Depth: 3
Heading Rank: 1

Heading: Esden's employment.

Text: 11 The material facts are not disputed. Esden was employed by Bank of Vermont (and its predecessor) from 1974 to December 7, 1990. During this time the Bank of Vermont became an indirect subsidiary of Bank of Boston, the Plan's sponsor. Throughout this time Esden was a participant in the Plan. The Plan was at all times a defined benefit plan subject to ERISA. Before 1989, the plan was a traditional defined benefit plan, employing a final-pay formula. Effective January 1, 1989, the Plan was amended to become a cash balance plan. 8 After its amendment the Plan was twice reviewed by the IRS, in 1990 and again in 1995. On each occasion the IRS issued a determination letter stating that the Plan was a qualified plan pursuant to I.R.C. § 401(a) et seq. 9 12 On the termination of her employment, the pension benefits Esden had accrued were 100% vested. See ERISA § 203(a)(2); I.R.C. § 411(a)(2). As the Plan allowed, she elected to receive those benefits as an immediate lump-sum payment. In March 1991, she received a check for $5,319.66. Of this amount, $3,771.93 was paid as the actuarial equivalent of the annuity she would have been entitled to receive commencing at age 65 under the terms of the unamended plan (Prior Plan Benefit). This amount is not disputed and forms no part of this appeal. 13 The remaining $1,547.73 represented the balance of her Cash Balance Account and was paid out as the lump-sum equivalent of all accrued benefits to which she was entitled under the cash balance plan (Cash Balance Benefit). This dispute arises over whether the Plan's methodology for calculating this amount was permissible under the parallel statutory provisions of ERISA and the Code and the regulations promulgated thereunder. We hold that it was not.