US - Claims of ERISA violation and fiduciary duty breaches have brought pharmaceutical companies Hospira and Abbott Labs to trial, as former and current members of their retirement plans seek losses.
The court found "the trier of fact could conclude from this evidence that Abbott knew Hospira would reduce or eliminate benefits but deliberately concealed this information from plaintiffs."
The court opinion continued: "Abbott's position is not helped by the evidence that at the time Abbott's management was structuring the spin-off transaction, confidential, lump-sum 'transition bonuses' were offered to several 'key' Abbott executives to compensate them for their lost benefits arising out of their transfer to Hospira."
Steven Sprenger, counsel for the plaintiffs, from law firm Sprenger and Lang, said: "The court's ruling clears the last remaining hurdle for the plaintiffs to seek restitution for Abbott Labs' violations of federal law that caused 10,000 people to lose valuable retirement benefits."
Sprenger continued: "We are anxious to get this case to trial as quickly as possible."
When the plaintiffs originally submitted the filing in November 2004, they also alleged the company violated section 510 of the Employee Retirement Income Security Act (ERISA).
The court found there was a case to argue that Abbott had created a pension scheme but had the specific intent of avoiding projected benefits.
The prolonged history of the case had been in and out of court with appeals to dismiss the claims from the companies.
The court set a status date to discuss case progress on 25 July 2008.
No one at Hospira was immediately available for comment.
This week's edition of Professional Pensions is out now.
Ben Gunnee reflects on 2018 and talks about the Fiduciary Management trends to keep an eye on in 2019
Lloyds Banking Group secured 630,000 new pension customers last year, according to its 2018 annual results.
Guy Opperman has rejected calls to speed up changes to auto-enrolment (AE) despite increasing pressure to boost contribution rates and overall savings pots.