Busald Funk Zevely and Amadeo Law Firm Announce Key Decision in BP Employee Benefits Case.

COVINGTON, Ky. -- Attorneys Mark Amadeo, Gail Langendorf and E. Andre Busald announced today an important decision in a ground-breaking case being tried in the United States District Court of Eastern District Of Kentucky involving alleged miscalculation of benefits by BP North America, Inc. when it converted its pension plan from a traditional defined benefit plan to a cash balance retirement plan.

The decision to deny the defendant's motion to dismiss the suit and allow the case to move forward was handed down by Judge David L. Bunning and lauded by attorneys Langendorf and Amadeo who are representing the former BP employee.

"We are extremely pleased with Judge Bunning's decision to deny the motion to dismiss and allow Mr. French's claim against BP to move forward," said Mr. Amadeo of the Amadeo Law Firm in Frederick, MD. "We firmly believe BP acted unlawfully when it converted its employees' pension plan to a cash balance plan -- in essence, by using an excessive interest rate to discount the payments under the traditional defined benefit plan, BP shortchanged participants out of retirement money that was due to them."

The suit, which is being pursued as a class action, claims that BP achieved a windfall when it unlawfully reduced the pension benefit that plaintiff Robert French and other participants had already earned at the time that the corporation switched to a cash balance retirement plan. At the conversion date, BP established opening balances in the cash balance plan that were supposed to be the lump sum equivalent value of the benefits that were to be paid from the traditional pension plan during participants' retirement. In one of the first suits asserting this claim, the attorneys allege that the company, instead, unlawfully discounted the retirement benefits by using an interest rate that exceeded the interest rates permitted under ERISA and the Internal Revenue Code for calculating lump sum equivalent values of retirement benefits. When miscalculated, individual employees stand to lose out on significant portions of their pension benefits retirement plans.

"This is an important case for both employees that are entitled to retirement benefits and corporations that have, or plan to, switch to cash balance plans," said co-counsel in the case, Gail Langendorf of Busald Funk Zevely P.S.C., a law firm in Florence, KY. "Companies must realize they are bound by both the Employee Retirement Income Security Act and the Internal Revenue code to fairly estimate benefits when switching employees' plans, and that when they don't, people will take notice."

The suit further alleges that BP repeatedly used excessive interest rates when it converted the traditional defined benefit plans of companies that merged with BP to cash balance plans. Lastly, the suit contends that certain participants lost benefits when they were retroactively inserted into to the cash balance plan and benefits in another plan were retroactively eliminated.

The only case to ever address such an issue was heard in United States District Court, in the Eastern Division of Missouri in 2007 [Edward W. SUNDER, Louis R. Jarodsky, v. U.S. BANK PENSION PLAN No. 4:05CV01153 ERW] in which the Judge found that the plan in question used an excessive interest rate to discount benefits when it established opening balances.

ABOUT THE FIRMS

Based in Florence Kentucky, Busald Funk Zevely, P.S.C. is a law firm with deep roots in the Northern Kentucky and the Greater Cincinnati community. Founded in 1976 the firm currently has nine lawyers--all of whom are licensed to practice in Kentucky with many also licensed in Ohio and various federal courts.

The Amadeo Law Firm, with offices in Washington, DC and Frederick, MD is a consulting and litigation boutique. Its founder, Mark A. Amadeo has previously litigated ERISA class action cases.