Pension ruling a mixed bag

"We look forward to showing the court our side of this argument," company spokeswoman Christy Heiser said.

Employers also hailed the ruling, but for other reasons.

"It affirms the viability of cash-balance plans," said Mike Chittenden of the ERISA Industry Committee, a group that represents major employers. "And it allows companies to provide transition benefits to employees, which is the most generous thing an employer can do in a conversion." (ERISA, the federal Employee Retirement Income Security Act, regulates employee pension plans.)

In the Southern California Gas case, two longtime employees had sued because the cash-balance formula resulted in their receiving no additional pension benefits for several years of work -- a phenomenon called wear-away.

The court, concurring with decisions made by four other appeals courts, said that wear-away was not inherently discriminatory.

"This essentially says that you can't take away benefits that have been earned and vested, but you have wide discretion to change future benefit accruals," Chittenden said.

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kathy.kristof@latimes.com