For corporate finance professionals, "the opinion doesn't deviate from the principles of ERISA," says Elizabeth Wilson Vaughan, an Atlanta-based attorney in the ERISA litigation group with Alston + Bird LLP. "But, it shows that how you communicate information about benefit plans is important. It has to be accurate and consistent."

In 1998, Cigna shifted from a traditional defined benefit plan, in which retirees would receive an annuity based on their pre-retirement salary and length of the service, to a cash balance plan, as outlined in . Under the cash balance plan, new retirees would receive a lump sum, based on annual contributions from Cigna, along with the interest earned.

Switching to a cash balance plan poses several challenges for plan sponsors, one of which is determining the amount that employees under the previous plan are to receive under the new plan, says Mary Komornicka, a retirement plan attorney with Larkin Hoffman, Minneapolis. The switch can get particularly thorny with older employees who have already have accumulated many years of service under a previous plan.

Typically --- although not always --- cash balance plans are less generous to participants than traditional defined benefit plans, Komornicka notes. So, employees who were on track to receive, say, $1000 per month under the traditional plan may find that they would have been eligible for just $800 each month if the cash balance plan had been in place during their tenure. At retirement, what amount should the employees get? "That was the crux of the issue," Komornicka says.