Full opinion text
ORDER R. BRYAN HARWELL, District Judge. Pending before the court are: 1) Defendants’ [Docket Entry #83] motion for judgment on the pleadings; 2) Plaintiffs’ [Docket Entry # 98] motion for partial summary judgment; 3) Defendants’ [Docket Entry # 106] cross motion for partial summary judgment; and 4) Plaintiffs’ [Docket Entry # 116] motion to amend the scheduling order and the complaint. The court held a hearing on the above-mentioned motions on December 19, 2007. Also pending before the court is Plaintiffs’ motion to certify class [Docket Entry # 33], which will be addressed in a subsequent order. Background Plaintiffs brought this lawsuit against Duke Energy Corporation and the Duke Energy Retirement Cash Balance Plan (collectively referred to as “Duke”). This case arises from Duke’s conversion of its traditional defined benefit plan to a cash balance plan. Under the traditional defined benefit plan, benefits were calculated using a formula based on factors including years of participation in the plan and the employee’s annual salary. In January 1997, Duke converted its traditional defined benefit plan to a cash balance plan. Cash balance plans, sometimes referred to as hybrid plans, are defined benefit plans that combine attributes of a 401(k) plan (defined contribution plan) and a traditional pension plan (defined benefit plan). The basic cash balance formula consists of a pay or compensation credit and an interest credit similar to the salary contribution and investment return of a 401 (k) plan. Compensation credits end after a participant terminates employment but the interest credits continue until the participant withdraws his benefit. Under the cash balance formula used by Duke in the implementation of its Cash Balance Plan, participants were assigned initial cash balance accounts. The cash balance accounts are hypothetical accounts to the extent that separate individual accounts were not actually established for each participant. The hypothetical cash balance accounts were set up alongside the participant’s frozen accrued benefit under the prior Duke plan. The Plan provides that once an employee has vested in the Plan through five years of participation, he can elect to receive his retirement benefit in a lump sum payment or in an annuity. Before the benefit is paid, the employee’s hypothetical account is converted into a dollar benefit based on actuarial assumptions stated in the Plan. Under ERISA, a plan amendment may not decrease, or “cut-back,” previously accrued benefits. 29 U.S.C. § 1054(g). In an attempt to ensure that the plan did not reduce a participant’s accrued benefit, the Plan utilized a “greater of’ formula, which converted the hypothetical cash balance account to an annuity, then compared it to the frozen accrued benefit under the prior Duke plan. The participant is then entitled to receive the greater of their frozen benefit under the prior plan, or the amount of their cash balance account. If the opening balance in the cash balance account is less than the value of the frozen accrued benefit under the prior plan, the credits earned under the Cash Balance Plan will not result in larger retirement benefits until they exceed the value of the frozen benefit. Plaintiffs allege that when Duke converted its pension plan to a cash balance plan on January 1, 1997, it violated the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001-1461 (“ERISA”) and the Age Discrimination in Employment Act, 29 U.S.C. §§ 621-634 (“ADEA”). Plaintiffs’ initial complaint contained six causes of action. Count one alleges an ERISA age discrimination claim under 29 U.S.C. § 1054(b). Plaintiffs maintain that Duke factors age into the calculation of interest credits, which results in older employees/participants receiving less interest credits than younger employees/participants. Plaintiffs contend that calculating interest credits in such a way violates § 1054(b), which prohibits reduction of an employee’s rate of benefit accrual because of that employee’s age. Plaintiffs seek a declaration that the Plan violates § 1054(b) and that Duke be required to restore all lost interest credits to participants plus any loss of benefits arising from the failure to properly award credits. Plaintiffs also request that Duke be required to pay participants any lost benefits arising from the alleged failure to properly pay interest credits and that any such payment be based on a single life age 65 annuity. Count two alleges a disparate treatment claim and a disparate impact claim under the ADEA. Plaintiffs allege that Duke knowingly and willfully adopted a cash balance plan that discriminated against employees over the age of 40. Similar to count one of the complaint, Plaintiffs’ disparate treatment claim is based on the allegation that Duke reduces the rate of an employee’s benefit accrual because of age. Plaintiffs’ disparate impact claim appears to be based upon the allegation that the implementation of the Plan resulted in a “wear away” effect of Plan benefits, which disparately impacted individuals over the age of 40. Plaintiffs contend that Duke knew or recklessly disregarded the fact that employees over the age of 40 would disproportionately suffer as a result of the conversion in that the conversion would effectively freeze benefit accruals for most employees over the age of 40. Plaintiffs seek an award of the lost benefit accruals resulting from the conversion as well as liquidated amounts based on such lost benefit accruals. Count three alleges an ERISA claim for benefits under 29 U.S.C. § 1132(a)(1). Plaintiffs state that Duke failed to properly calculate the lump sum distributions that participants are entitled to under the Plan. Plaintiffs allege that Duke, rather than using the appropriate interest rate to reduce participants’ retirement benefit to present value, used an interest rate that deprives participants of the full benefit promised under the Plan. Plaintiffs contend that Duke’s method of calculating lump sum distributions effectuates an unlawful reduction in accrued retirement benefits in violation of ERISA’s anti-cut back rule, 29 U.S.C. § 1054(g), and the express terms of the Plan. Plaintiffs seek a declaration that Duke’s method of calculating lump sum distributions violates ERISA’s anti-cut back provisions and the express terms of the Plan. Plaintiffs also request that Duke be required to restore any lost benefits resulting from Duke’s alleged unlawful calculation of lump sum distributions. Count four also alleges an ERISA claim for benefits under 29 U.S.C. § 1132(a)(1). Plaintiffs allege that during the 1997 and 1998 Plan years, Duke failed to follow the procedure specified in the Plan for calculating the appropriate interest rate credit. Plaintiffs allege that as a result of this failure, participants who received lump sum distributions or monthly annuity payments did not receive the full amount they were entitled to under the Plan. Plaintiffs further allege that participants who have not yet retired will not receive the full amount of benefits they are entitled to unless the error in calculation is corrected and an appropriate amount is credited to their “hypothetical” accounts. Plaintiffs seek a declaration that Duke erroneously calculated interest credits during the 1997 and 1998 Plan years and that such error resulted in the wrongful denial of benefits to retirees. Plaintiffs request that Duke be required to restore any lost benefits resulting from their alleged erroneous calculation of interest credits. Count five alleges that the implementation of the Cash Balance Plan resulted in an impermissible back loading of benefits. According to Plaintiffs, the Plan used an approximate 7 percent interest rate to calculate the present value of accrued benefits under the prior plan. Plaintiffs allege that because accruals under the Cash Balance Plan were based on a lower interest rate, the present value of accrued benefits under the prior plan was substantially greater than the accrued benefits under the cash balance formula. Plaintiffs allege that under the Cash Balance Plan participants do not accrue any additional benefits until the value of their hypothetical cash balance account exceeds the present value of accrued benefits under the prior plan. Thus, Plaintiffs contend that the manner in which Duke implemented the Cash Balance Plan effectively froze accrual rates for employees with long-term service in violation of 29 U.S.C. § 1054(b). Plaintiffs seek a declaration that Duke back loaded accruals in violation of § 1054(b)(1) and (2). Plaintiffs also request that Duke be required to restore any lost benefits resulting from Duke’s alleged unlawful back loading of benefits and that Duke be ordered to retroactively reform the Plan so that it complies with § 1054(b)(1). Count six alleges Duke breached its fiduciary duties owed under ERISA. In particular, Plaintiffs allege that Duke breached its fiduciary duties by misleading employees about the effects of the conversion to the Cash Balance Plan and the purpose behind certain amendments to the Plan concerning the calculation of interest credits. Plaintiffs also contend that Duke and/or its designee breached its fiduciary duties by committing numerous errors in the calculation of opening account balances and/or the calculation of interest credits. Plaintiffs further allege that Duke breached the standards of care in the manner in which it administered the Cash Balance Plan by arbitrarily changing opening account balances in attempts to circumvent the notice requirements of § 1054(h) of ERISA. Finally, Plaintiffs allege that Duke breached its duty of reasonable care when it allowed the Cash Balance Plan to operate in violation of ERISA and failed to correct, among other things, the problems related to lump sum distributions, back loading of benefits, and aged based benefits accrual. Plaintiffs request that Duke be required to reform the Cash Balance Plan so that it is in compliance with the applicable laws. Plaintiffs further request that Duke be required to recalculate participants/beneficiaries’ benefits under the revised and reformed Plan and pay restitution to the Plan participants. Additionally, Plaintiffs seek the appointment of an independent auditor to review the Cash Balance Plan and all cash balance accounts. Discussion I. Motion for Judgment on the Pleadings A. Rule 12(c) Standard When reviewing a motion made under Federal Rule of Civil Procedure 12(c), the court applies the same standard applicable to motions made under Rule 12(b)(6). Burbach Broad. Co. v. Elkins Radio Corp., 278 F.3d 401, 405-6 (4th Cir.2002); Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir.1999). The court must “accept all well-pleaded allegations in the plaintiffs complaint as true and draw all reasonable factual inferences from those facts in the plaintiffs favor.” Edwards, 178 F.3d at 244. The plaintiffs “[fjactual allegations must be enough to raise a right to relief above the speculative level.” Bell Atlantic Corp. v. Twombly, — U.S. -, 127 S.Ct. 1955, 1965, 167 L.Ed.2d 929 (2007). “[0]nee a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint.” Twombly, 127 S.Ct. at 1969. A complaint attacked by a motion to dismiss will survive if it contains “enough facts to state a claim to relief that is plausible on its face.” Id. at 1974; see also, Giarratano v. Johnson, 521 F.3d 298, 2008 WL 771503, at *4 (4th Cir. March 25, 2008); Self v. Norfolk Southern Corp., 264 Fed.Appx. 313, 314 (4th Cir.2008) (unpublished). B. Count One (ERISA Age Discrimination) Count one alleges that Duke factors age into the calculation of interest credits, which results in older employees/participants receiving less interest credits than younger employees/participants. Plaintiffs contend that calculating interest credits in such a way violates 29 U.S.C. § 1054(b) of ERISA. Plaintiffs allege that: 1) under the Plan’s scheme for crediting the hypothetical cash balance account, a participant’s benefit accruals (expressed as an age 65 annuity) decrease as the participant ages; 2) the cash balance formula used by Duke for determining benefits reduces a participant’s accrued benefit solely on increases in age or service; and 3) the rate of an employee’s benefit accrual under the Cash Balance Plan decreases on account of the employee’s age. [Complaint, at ¶¶ 61-62], Simply stated, Plaintiffs contend that Plan participants over the age of 40 were damaged because, as a result of the conversion to the Plan, they will receive less interest credits before retirement than younger participants. Id. at ¶ 90. Under ERISA, a defined benefit plan is impermissibly age discriminatory “if, under the plan, an employee’s benefit accrual is ceased, or the rate of an employee’s benefit accrual is reduced, because of the attainment of any age.” 29 U.S.C. § 1054(b)(1)(H)(i). Duke argues that count one should be dismissed because Plaintiffs have failed to state a claim of age discrimination under ERISA. Specifically, Duke argues that neither the Plan’s rate of benefit accrual nor the Plan’s benefit accrual terms discriminate against employees “because of the attainment of any age.” Duke contends that benefits accrue through monthly allocation of credits. Duke further contends that pay credits increase with age and service, and all participants receive the same interest rate, regardless of their age. However, Plaintiffs state that under the Cash Balance Plan age discrimination arises because older workers accrue their retirement benefits at a slower rate than similarly situated younger workers. Plaintiffs state that younger workers have more years to receive interest credits in their hypothetical accounts. Because older workers have fewer years in which to earn their interest credits, Plaintiffs contend that the conversion of the hypothetical account balance into an age 65 annuity results in a smaller retirement benefit for older workers. This issue involves a matter of statutory interpretation. Specifically, whether the phrase “rate of an employee’s benefit accrual” refers to the employer’s contributions to the plan (inputs), or the employees’ actual retirement benefits (outputs). Duke argues that the plain meaning of the statute indicates that the “rate of an employee’s benefit accrual” is necessarily the periodic rate of increase specified by the plan formula, the input not the output of that formula. Plaintiffs, on the other hand, contend that “rate of benefit accrual” refers to the benefit, i.e. the output, from the plan. Plaintiffs argument hinges upon the distinction between defined benefit plans and defined contribution plans. Plaintiffs argue that with defined benefit plans, employees are promised a “defined benefit.” However, with defined contribution plans, employees are promised a “defined contribution.” Because Duke’s Cash Balance Plan is a defined benefit plan under ERISA, Plaintiffs contend that the employee/participant in the Cash Balance Plan is therefore promised and entitled to receive a defined benefit. Accordingly, Plaintiffs maintain that the ERISA age discrimination provision applicable to defined benefit plans, which utilizes the phrase “rate of ... benefit accrual,” must be read to refer to the benefit, i.e. the output. In short, Plaintiffs read 29 U.S.C. § 1054(b)(1)(H)(i) to prohibit a reduction in the amount an employee mil ultimately receive, or as stated by Duke, a reduction in the rate of an employee’s accrued benefit, because of the attainment of any age. Duke reads § 1054(b)(1)(H)(i) to prohibit a reduction in the rate an employee accrues benefits because of the attainment of any age, regardless of the amount the employee will ultimately receive. By way of example, Plaintiffs argue that Duke’s Cash Balance Plan is age discriminatory because an employee with 15 years of service who was 55 years of age on the date the Cash Balance Plan was adopted will receive less interest credits and therefore a lower retirement benefit than an employee with 15 years of service who was 35 years of age on the date the Cash Balance Plan was adopted. Thus far, the Third, Sixth and Seventh Circuits have addressed ERISA age discrimination claims under 29 U.S.C. § 1054(b)(1)(H)(i) stemming from the conversion of traditional pension plans to cash balance plans and each has rejected plaintiffs’ claims of age discrimination under ERISA. The Seventh Circuit, in Cooper v. IBM Pers. Pension Plan, was the first Court of Appeals to address the issue of whether cash balance plans were inherently age discriminatory. 457 F.3d 636 (7th Cir.2006). In Cooper, the plaintiffs were older participants in IBM’s cash balance defined benefit plan. The district court ruled in favor of the plaintiffs and concluded that Congress intended the term “benefit accrual” as it is used in § 1054(b)(1)(H)(i) to mean “accrued benefit.” Cooper v. IBM Pers. Pension Plan, 274 F.Supp.2d 1010, 1022 (S.D.Ill.2003). The term “accrued benefit” is defined as “the individual’s accrued benefit determined under the plan and ... expressed in the form of an annual benefit commencing at normal retirement age.” 29 U.S.C. § 1002(23)(A). The district court opined that “cash balance arrangements are defined benefit plans and, therefore, measure accrued benefits in terms of annuities, not in terms of the contributions themselves.” Cooper, 274 F.Supp.2d at 1021. Describing the underlying arithmetic of cash balance arrangements, the district court stated “each year, as a cash balance participant ages, the same contribution made for her in the previous year declines in value in annuity terms.” Id. The district court rejected IBM’s “time value of money” argument and found that IBM’s cash balance plan did not comport with the literal and unambiguous provisions of § 1054(b)(1)(H). Id. at 1022. The district court noted that “interest credits will always be more valuable to a younger employee as opposed to an older employee.” Id. at 1021. The Seventh Circuit reversed concluding that “[t]he phrase ‘benefit accrual’ reads most naturally as a reference to what the employer puts in (either in absolute terms or as a rate of change), while the defined phrase ‘accrued benefit’ refers to outputs after compounding.” Cooper, 457 F.3d at 639. The court found support for its conclusion in proposed Treasury Department regulations. The draft regulations state “the rate of benefit accrual ... is the increase in the participant’s accrued normal retirement benefit for the year.” 67 Fed.Reg. 76123, 76125 (Dec. 11, 2002). “[T]he rate of benefit accrual under an eligible cash balance plan ... is permitted to be determined as the additions to the participant’s hypothetical account for the plan year, except that previously accrued interest credits are not included in the rate of benefit accrual.” 67 Fed.Reg. at 76126. Thus, the Treasury Department looks at the rate of contribution when determining the rate of benefit accrual, rather than the output from the plan at normal retirement age. Cooper, 457 F.3d at 640. The Seventh Circuit also compared the anti-discrimination provision applicable to defined benefit plans (29 U.S.C. § 1054(b) (1)(H)(i)) with the anti-discrimination provision applicable to defined contribution plans (29 U.S.C. § 1054(b)(2)(A)). Id. at 638. The defined contribution plan anti-discrimination provision provides that “[a] defined contribution plan satisfies the requirements of this paragraph if, under the plan, allocations to the employee’s account are not ceased, and the rate at which amounts are allocated to the employee’s account is not reduced, because of the attainment of any age.” 29 U.S.C. § 1054(b)(2)(A). The defined benefit plan anti-discrimination provision, at issue in the present case, provides that “a defined benefit plan shall be treated as not satisfying the requirements of this paragraph if, under the plan, an employee’s benefit accrual is ceased, or the rate of an employee’s benefit accrual is reduced, because of the attainment of any age.” 29 U.S.C. § 1054(b)(1)(H)(i). The court stated that “[tjhese appear to say the same thing, except that the rule for defined-benefit plans tells us what is not allowed, while the rule for defined-contribution plans tells us what works. Either way, the employer can’t stop making allocations (or accruals) to the plan or change their rate on account of age.” Cooper, 457 F.3d at 638. Because every employee covered under the IBM plan receives the same 5% pay credit and the same interest credit per annum, the court concluded that IBM’s plan did not discriminate against older employees. Id. at 642. Interestingly, the court explained that IBM’s old plan, which was a traditional pension plan that provided an annual pension based on a function of closing salary multiplied by the number of years of service, favored older workers because salaries increase with seniority. Id. “Replacing a plan that discriminates against the young with one that is age-neutral does not discriminate against the old.” Id. With Register v. PNC Fin. Servs. Group, Inc., the Third Circuit weighed in on the cash balance plan controversy. 477 F.3d 56 (3d Cir.2007). Register involved a claim by a group of plan participants that the PNC cash balance plan violated ERISA’s anti-age discrimination provision because, under the plan, an employee’s benefit accrual allegedly decreased because of age. Register, 477 F.3d at 61. Appellants argued that “the term ‘benefit accrual’ refers to the employee’s retirement benefit (the age-65 annuity), i.e. the output from the plan.” Id. at 63-64. PNC argued that “ ‘benefit accrual’ refers to the employer’s contributions in the form of credits to the hypothetical accounts, i.e. the inputs to the plan.” Id. at 65. “[A]c-cording to PNC, because all participants receive the same interest credit, there is no discrimination against older participants and any increase in the value of the annuity results from the time value of money, not discrimination.” Id. Concluding that the term “benefit accrual” referred to the credits deposited into the participant’s cash balance account, i.e. the inputs, the court stated that “ ‘cash balance plans define the benefit in terms of a stated account balance,’ not ‘as a series of monthly payments for life to begin at retirement’ like a traditional defined benefit plan.” Id. at 68. Like the Seventh Circuit in Cooper, the court compared the anti-discrimination provisions applicable to defined benefit plans (29 U.S.C. § 1054(b)(1)(H)(i)) and defined contribution plans (29 U.S.C. § 1054(b)(2)(A)). Agreeing with the Seventh Circuit in Cooper, the Third Circuit stated “[t]he provisions are nearly identical and prohibit the same behavior, i.e., ‘the employer can’t stop making allocations (or accruals) to the plan or change their rate on account of age.’ ” Id. (citing Cooper, 457 F.3d at 638). Importantly, the court noted: The effect of the cash balance design that appellants challenge (the accumulation of interest) is identical to accumulation of interest on employer contributions under defined contribution plans. Accordingly, employer contributions in both instances ultimately are more valuable when those contributions are made to younger employees as the contributions have a longer time to grow ... We do not find any support for appellants’ argument that Congress wanted to prohibit such a consequence with respect to cash balance plans, but legitimize it for defined contribution plans. Rather, the similarities of the anti-discrimination provisions governing defined benefit and defined contribution plans suggest that Congress was not seeking to prohibit the consequence of the time value of money in either circumstance. Register, 477 F.3d at 69. More recently, in Drutis v. Rand McNally & Co., the Sixth Circuit Court of Appeals followed the lead of Cooper and Register and rejected plaintiffs’ contentions that cash balance plans discriminated against older workers. Drutis, 499 F.3d 608, 615 (6th Cir.2007). The court noted that plaintiffs’ arguments treat the time value of money as age discrimination. Drutis, 499 F.3d at 615. Again, comparing the anti-discrimination provisions for defined-benefit plans and defined-contribution plans, the court concluded “[ijnterest is not treated as age discrimination for a defined-contribution plan, and the fact that these subsections are so close in both function and expression implies that it should not be treated as discriminatory for a defined-benefit plan either.” Id. The court agreed with the Seventh and Third Circuits “that the term ‘benefit accrual’ as used in § 1054(b)(1)(H)(i) refers to the employer’s contribution [input] to the defined benefit plan.” Id. Because neither the contribution rate nor the interest rate change with age, the court concluded that the plan was not age discriminatory. Id. This court agrees with the analysis of the three Circuit Courts that have confronted the issue and finds that Duke’s Cash Balance Plan is not inherently age discriminatory under the terms of 29 U.S.C. § 1054(b)(1)(H)(i). When interpreting a statute, the court must begin by examining the literal and plain language of the statute. Markovski v. Gonzales, 486 F.3d 108, 110 (4th Cir.2007). The court’s inquiry must cease if the statutory language is unambiguous and the statutory scheme is coherent and consistent. United States v. Hayes, 482 F.3d 749, 752 (4th Cir.2007). An undefined term should be construed in accordance with its ordinary or natural meaning. United States v. Mills, 485 F.3d 219, 222 (4th Cir.2007). In determining the plain meaning, the court must consider the context in which the statutory words are used. Ayes v. U.S. Dept. of Veterans Affairs, 473 F.3d 104, 108 (4th Cir.2006). The statute should be read as a whole and statutory phrases should not be construed in isolation. Ayes, 473 F.3d at 108. “[C]ourts should disfavor interpretations of statutes that render language superfluous.” Sayyed v. Wolpoff & Abramson, 485 F.3d 226, 231 (4th Cir.2007) (quoting Connecticut Nat’l Bank v. Germain, 503 U.S. 249, 253, 112 S.Ct. 1146, 117 L.Ed.2d 391 (1992)). “Statutes should be interpreted to avoid untenable distinctions and unreasonable results whenever possible.” American Tobacco Co. v. Patterson, 456 U.S. 63, 71, 102 S.Ct. 1534, 71 L.Ed.2d 748 (1982). This court finds that the phrase “rate of an employee’s benefit accrual” was meant to refer to the employer’s contributions to the plan (inputs), not the employee’s actual retirement benefits (outputs). Cash balance plans are not defined in terms of an age 65 annuity, but are defined in terms of a hypothetical account balance that increases with the addition of pay credits and interest credits. The rate of benefit accrual, therefore, is not determined by the change in the age 65 annuity, but by the annual change in the hypothetical account balance. See Cooper, 457 F.3d at 639. It is unreasonable to conclude that the terms “benefit accrual” and “accrued benefit” can be used interchangeably. In addition to prohibiting decreases in the rate of benefit accrual, § 1054(b) (1)(H)(i) provides that a defined benefit plan is imper-missibly age discriminatory if “an employee’s benefit accrual is ceased ... because of the attainment of any age.” If benefit accrual actually means accrued benefit, as Plaintiffs suggest, the phrase which prohibits an employee’s benefit accrual from ceasing on account of age makes no sense. That is so because an accrued benefit is a benefit that has already accrued making it rightfully the property of the participant. A benefit that has already accrued in favor of a participant cannot be ceased. Under Duke’s Cash Balance Plan, the pay credits and interest credits are applied to each employee’s hypothetical cash balance account in an age neutral fashion. Cash balance plans are not rendered discriminatory simply because younger employees have more time within which to accrue interest credits than older employees. As stated by the Third, Sixth and Seventh Circuits, such is the result of the “time value of money.” Furthermore, there is simply no logical basis for the proposition that Congress would permit the effects of interest and the time value of money with regard to defined-contribution plans, but prohibit them with regard to defined-benefit plans. See Register, 477 F.3d at 68-69. This conclusion is reinforced by comparing the anti-discrimination provisions applicable to defined-contribution plans and defined-benefit plans. Alternatively, Plaintiffs state that even if “rate of an employee’s benefit accrual” refers to the inputs to the plan rather than the outputs of the plan, the Duke Cash Balance Plan remains age discriminatory because the employer’s inputs (in the form of interest credits) cease directly on account of age. The Duke Cash Balance Plan states that “Interest Credits will be added to the cash balance account of each participant who has not commenced receiving Retirement Income.” [1999 Plan § 5.04(a), Docket Entry # 96-7] (emphasis added). The Plan also states that “[a] Participant who retires after his Normal Retirement Date may begin receiving Retirement Income under this provision for the month following his Postponed Retirement Date or for any month thereafter, provided that benefits must commence no later than April 1 following the year in which the Participant attains age 70½.” Id. at § 6.03(b). Plaintiffs argue that these provisions, when read together, provide that a Participant’s interest credits will cease based on the Participant having reached a certain age. At the hearing on these motions, Duke explained that I.R.C. § 401(a)(9) required that benefit payments commence for retirees no later than April 1 following the calendar year in which the employee attains age Wi. [Transcript of December 19, 2007 Motions Hearing, at pgs. 6-9, 42-44, Docket Entry # 180]. Duke argues that the Plan provision that requires benefits to commence for retirees no later than April 1 following the year in which the participant reaches age 70)6 applies only to individuals who have retired before age 70]é and is not unlawful because it provides for exactly what the Internal Revenue Code requires. Id. at 8, 44. Duke notes that nothing in the Plan requires an individual to retire at a certain age and that as long as an individual continues working he or she will continue to receive interest credits. Id. at 7. Duke also argues that ERISA’s anti-age discrimination provision does not protect a retiree’s rate of benefit accrual, but only protects an employee’s rate of benefit accrual. Id. at 8, 44. Finally, Duke argues that Plaintiffs have no standing to bring a claim that interest credits improperly cease under the Plan after a participant reaches age 70/& because the complaint does not allege that these Plan provisions were ever applied to any named Plaintiff. Title 26 U.S.C. § 401(a) states: (a) Requirements for qualification. — A trust created or organized in the United States and forming part of a stock bonus, pension, or profit-sharing plan of an employer for the exclusive benefit of his employees or their beneficiaries shall constitute a qualified trust under this section- (1) if contributions are made to the trust by such employer, or employees, or both, or by another employer who is entitled to deduct his contributions under section 404(a)(3)(B) (relating to deduction for contributions to profit-sharing and stock bonus plans), or by a charitable remainder trust pursuant to a qualified gratuitous transfer (as defined in section 664(g)(1)), for the purpose of distributing to such employees or their beneficiaries the corpus and income of the fund accumulated by the trust in accordance with such plan; (2) if under the trust instrument it is impossible, at any time prior to the satisfaction of all liabilities with respect to employees and their beneficiaries under the trust, for any part of the corpus or income to be (within the taxable year or thereafter) used for, or diverted to, purposes other than for the exclusive benefit of his employees or their beneficiaries (but this paragraph shall not be construed, in the case of a multiemployer plan, to prohibit the return of a contribution within 6 months after the plan administrator determines that the contribution was made by a mistake of fact or law (other than a mistake relating to whether the plan is described in section 401(a) or the trust which is part of such plan is exempt from taxation under section 501(a), or the return of any withdrawal liability payment determined to be an overpayment within 6 months of such determination); (3) if the plan of which such trust is a part satisfies the requirements of section 410 (relating to minimum participation standards); and (4) if the contributions or benefits provided under the plan do not discriminate in favor of highly compensated employees (within the meaning of section 414(q)). For purposes of this paragraph, there shall be excluded from consideration employees described in section 410(b)(3)(A) and (C) (9) Required distributions.— (A) In general. — A trust shall not constitute a qualifíed trust under this subsection unless the plan provides that the entire interest of each employee— (i) will be distributed to such employee not later than the required beginning date, or (ii) will be distributed, beginning not later than the required beginning date, in accordance with regulations, over the life of such employee or over the lives of such employee and a designated beneficiary (or over a period not extending beyond the life expectancy of such employee or the life expectancy of such employee and a designated beneficiary) ... (C) Required beginning date.— For purposes of this paragraph— (i) In general. — The term “required beginning date” means April 1 of the calendar year following the later of— (I) the calendar year in which the employee attains age 70 % or (II) the calendar year in which the employee retires. 26 U.S.C. § 401(a) (emphasis added). Internal Revenue Code § 401(a)(9) sets forth “certain requirements for an employee benefits plan to qualify for tax exemption under the Code.” Estate of Kelley v. Ochocinski, No. 03-cv-723, 2005 WL 578163, at *5 (W.D.N.Y. March 9, 2005). Section 401(a)(9) provides minimum distribution requirements for qualified pension plans and “limits use of pension funds as tax shelters beyond age 70½.” Lee v. California Butchers’ Pension Trust Fund, 154 F.3d 1075, 1081 (9th Cir.1998). “Failure to adhere to the minimum distribution requirements results in the imposition of a 50% excise tax on the amount by which the minimum required distribution exceeds the actual amount distributed during the taxable year.” In re Garner, No. 04-13618C-7G, 2005 WL 1288335, at *3 (Bankr. M.D.N.C. April 29, 2005) (citing 26 U.S.C. § 4974(a)). Under § 401(a)(9), a qualified pension plan must begin distributing the entire interest of the employee no later than the “required beginning date.” 26 U.S.C. § 401 (a)(9)(A)(i). That section defines the “required beginning date” as the later of either: 1) April 1 following the calendar year in which the employee actually retires; or 2) April 1 following the calendar year in which the employee reaches age 70)6. 26 U.S.C. § 401(a)(9)(C)(i) (I-II). Section 5.04(a) of Duke’s Cash Balance Plan is entitled “Interest Credits” and simply provides that interest credits will be added to the cash balance account of each Participant who has not begun receiving retirement income. Section 6.03(b), under the heading “Postponed Retirement” and sub-heading “Commencement,” contemplates a situation in which the employee retires after normal retirement age, 65, but before age 70/6. In such a case, I.R.C. § 401(a)(9) requires the Plan to begin distributing retirement income to the retired employee no later than April 1 following the year in which the employee attains age 70/6. Failure to do so could jeopardize the Plan’s tax exempt status and/or subject the Plan to an excise tax of 50% of the difference between the amount actually distributed during the taxable year and the minimum required distribution. See 26 U.S.C. § 401(a)(9) (A); 26 U.S.C. § 4974. Plaintiffs complain that §§ 5.04(a) and 6.03(b) of the 1999 Plan render the Plan unlawful because those sections mandate the cessation of interest credits upon the Participant having reached approximately 70)6 years of age. Plaintiffs, however, have not attempted to explain how §§ 5.04(a) and 6.03(b) of the 1999 Plan could render the Plan unlawful when it appears that § 6.03(b) was written to ensure the Plan’s compliance with the minimum distribution requirements of I.R.C. § 401(a)(9). Indeed, this conclusion is obvious when the language of I.R.C. § 401(a)(9) is compared with § 6.03(b) of the 1999 Plan. Plaintiffs’ claim, in essence, challenges the rate of benefit accrual for individuals who have retired and, by virtue of § 6.03(b) of the Plan, been “forced” to begin receiving retirement benefits at approximately age 70)6, which under § 5.04(a) of the Plan results in the cessation of interest credits. Plaintiffs’ claim fails because ERISA’s anti-age discrimination provision prohibits decreases in or the cessation of the “rate of an employee’s benefit accrual” because of the attainment of any age, not the rate of a retiree’s, benefit accrual or the rate of a participant’s benefit accrual. 29 U.S.C. § 1054(b)(1)(H)(i). As stated above, under § 1054(b)(1)(H)(i), a defined benefit plan is age discriminatory if “an employee’s benefit accrual is ceased, or the rate of an employee’s benefit accrual is reduced, because of the attainment of any age.” Id. (emphasis added). ERISA defines an “employee” as “any individual employed by an employer.” 29 U.S.C. § 1002(6). In contrast, “participant” means “any employee or former employee of an employer ...” 29 U.S.C. § 1002(7). If Congress had intended to expand the anti-discrimination provision to protect individuals who were former employees or retirees, they could have simply used the term “participant,” rather than employee. Pursuant to the principles of statutory construction discussed above, Plaintiffs cannot force the term “participant” into ERISA’s anti-age discrimination provisions. Because § 1054(b)(1)(H)(i) protects only an “employee’s” rate of benefit accrual, Plaintiffs’ claim challenging the cessation of interest credits for retired individuals who reach approximately age 70)6 is dismissed. In sum, Duke’s motion for judgment on the pleadings is granted as to count one. Additionally, Duke’s cross motion for partial summary judgment is granted and Plaintiffs’ motion for partial summary judgment is denied. C. Count Two (ADEA) Count two alleges claims under the ADEA for disparate treatment, 29 U.S.C. § 623(i), and disparate impact, 29 U.S.C. § 623(a)(2). Plaintiffs allege that Duke knowingly and willfully adopted a cash balance plan that discriminated against employees over the age of 40. Plaintiffs also allege that the implementation of the Plan, through use of the “greater of’ formula discussed above, resulted in a “wear away” effect of Plan benefits, which disparately impacted individuals over the age of 40. Plaintiffs contend that Duke knew or recklessly disregarded the fact that employees over the age of 40 would disproportionately suffer as a result of the conversion in that the conversion would effectively freeze benefit accruals for most employees over the age of 40. Plaintiffs seek an award of the lost benefit accruals resulting from the conversion as well as liquidated amounts based on such lost benefit accruals. Duke argues that count two should be dismissed because Plaintiffs have failed to state a claim under the ADEA. Plaintiffs argue that Duke’s Cash Balance Plan gives rise to an ADEA claim under both “disparate treatment” and “disparate impact” analysis. 1. Disparate Treatment Duke contends that Plaintiffs have failed to state a claim of disparate treatment. Duke’s argument in this regard is similar to its argument under count one. Indeed, at the hearing, Plaintiffs’ counsel indicated that its disparate treatment ADEA claim, like Plaintiffs’ ERISA age discrimination claim, also turned on the meaning of the phrase “rate of an employee’s benefit accrual.” The ADEA utilizes language almost identical to ERISA’s anti-age discrimination provisions. Specifically, 29 U.S.C. § 623(i)(1) provides: (1) Except as otherwise provided in this subsection, it shall be unlawful for an employer, an employment agency, a labor organization, or any combination thereof to establish or maintain an employee pension benefit plan which requires or permits— (A) in the case of a defined benefit plan, the cessation of an employee’s benefit accrual, or the reduction of the rate of an employee’s benefit accrual, because of age, or (B) in the case of a defined contribution plan, the cessation of allocations to an employee’s account, or the reduction of the rate at which amounts are allocated to an employee’s account, because of age. Duke contends that 29 U.S.C. § 623(i), like 29 U.S.C. § 1054(b) (1)(H), bars discrimination with regard to the inputs to the benefit formula, not the output of the plan. Duke notes that 29 U.S.C. § 623(i) and 29 U.S.C. § 1054(b)(1)(H) were enacted as part of the same act, the Omnibus Budget Reconciliation Act of 1986 (“OBRA”). The House Conference Report accompanying the OBRA provisions stated that the two provisions are to be interpreted in a consistent manner. H.R. Conf. Rep. No. 99-1012, at 378, U.S.Code Cong. & Admin.News 1986, pp. 3868, 4023. For the reasons discussed under count one, Plaintiffs’ claim of disparate treatment under the ADEA fails. The phrase “rate of an employee’s benefit accrual,” as it is used in 29 U.S.C. § 623(i), refers to inputs to the plan, rather than outputs. Accordingly, Plaintiffs have failed to state a disparate treatment claim based on the allegation that younger employees have more time within which to accrue interest credits than older employees. The economic effect of the time value of money does not amount to discrimination because of the attainment of any age. 2. Disparate Impact — “Wear Away” Effect Duke argues that Plaintiffs’ disparate impact claim based on the “wear away” effect fails as a matter of law. Duke contends that because 29 U.S.C. § 623(i) does not use the phrase “adversely affect,” it does not permit disparate impact claims. Duke relies on Smith v. City of Jackson, in which Justice Scalia wrote “the only provision of the ADEA that could conceivably be interpreted to” prohibit adverse impacts is § 628(a)(2). Smith, 544 U.S. 228, 246, 125 S.Ct. 1536, 161 L.Ed.2d 410 (2005). Duke argues that Plaintiffs cannot pursue their disparate impact claim under § 623(a)(2) because that section applies only to an employer’s conduct that “limit[s], segregates or classif[ies] his employees in any way.” 29 U.S.C. § 623(a)(2). Duke submits that because the “greater of’ formula is applied equally to all employees, it does not implicate the conduct governed by § 623(a)(2). Furthermore, Duke argues that because § 623(i) is the sole ground for challenging allegedly discriminatory benefit accruals under the ADEA and § 623(i) does not permit disparate impact claims, Plaintiffs’ disparate impact claim fails as a matter of law. In response, Plaintiffs argue that Duke misconstrues the Smith case and that the Smith case specifically holds that disparate impact claims were permitted under the ADEA. This court agrees. Plaintiffs’ disparate impact claim is brought under 29 U.S.C. § 623(a)(2), which provides: It shall be unlawful for an employer: to limit, segregate, or classify his employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s age. Plaintiffs’ complaint states: “[t]he implementation of the Duke Energy Retirement Cash Balance Plan resulted in “wear away” as described above. This, in turn, meant that long-term employees had benefit accruals frozen for several years. The “wear away” effect disparately impacted employees over the age of 40.” [Complaint, at ¶ 93, Docket Entry # 1]. Plaintiffs’ complaint sufficiently states an ADEA disparate impact claim based on the “wear away” effect suffered by employees over the age of 40. When asserting a claim of age discrimination under a disparate impact theory, “the employee is ‘responsible for isolating and identifying the specific employment practices that are allegedly responsible for any observed statistical disparities.’ ” Smith, 544 U.S. at 241, 125 S.Ct. 1536. Plaintiffs have identified the specific employment practice being challenged, i.e. Duke’s conversion of its traditional pension plan to a cash balance plan and the “wear away” effect caused by the manner in which the conversion was implemented. Plaintiffs have alleged that employees over the age of 40 disproportionately suffer as a result of the wear away period because older employees must endure longer periods during which no additional benefits accrue. Accordingly, Plaintiffs have stated facts sufficient to allege an ADEA disparate impact claim based on the “wear away” effect that is plausible on its face. Duke’s motion for judgment on the pleadings, with regard to count two, is granted in part and denied in part. Plaintiffs’ ADEA disparate treatment claim under 29 U.S.C. § 623(i) is dismissed; Plaintiffs’ ADEA disparate impact claim based on the “wear away” effect may proceed. D. Count Three (Improper Lump Sum Calculation) Count three alleges that Duke failed to properly calculate the lump sum distributions that participants are entitled to under the Plan. Plaintiffs allege that Duke, rather than using the appropriate interest rate to reduce participants’ retirement benefit to present value, used an interest rate that deprives participants of the full benefit promised under the Plan. For defined benefit plans, a participant’s “accrued benefit” means “the individual’s accrued benefit determined under the plan and, ... expressed in the form of an annual benefit commencing at normal retirement age,” i.e. an age 65 annuity. 29 U.S.C. § 1002(23)(A). As an alternative to the age 65 annuity, plans may offer other forms of payment of the accrued benefit, including a lump sum payment. The Plan at issue in this case offers a lump sum payment as an alternative to the age 65 annuity. If a defined benefit plan offers a lump sum payment to the individual, the lump sum must be the actuarial equivalent of the individual’s accrued benefit. 29 U.S.C. § 1054(c)(3). To determine the actuarial equivalent of the individual’s accrued benefit, the accrued benefit must be projected to the individual’s normal retirement age— 65, then reduced to present value. The key issue surrounding Plaintiffs’ claim in count three is whether Duke used the appropriate interest rates in determining the actuarial equivalent of the participants’ accrued benefit. In other words, the issue is whether Duke used the appropriate interest rates to: 1) project the accrued benefit to normal retirement age; and 2) reduce the projection to present value. Internal Revenue Code § 417(e) specifies the maximum interest rate that may be used to determine the actuarial equivalent of the accrued benefit and defines this interest rate as the “applicable interest rate.” Because this interest rate is used to discount the future annuity payments to a present value amount (the lump sum), a higher interest rate produces a lower lump sum for any given annuity. Thus, by defining the maximum interest rate, I.R.C. § 417(e) guarantees the minimum amount of the lump sum distribution that may be made in lieu of a participant’s accrued benefit as stated in their hypothetical cash balance account. A plan may, by express plan provision, exceed this guaranteed minimum lump sum distribution by specifying an interest rate that is lower than the “applicable interest rate” set forth in § 417(e). Plaintiffs allege that Duke, by the express terms of the Plan, was required to apply an interest rate lower than the “applicable interest rate” mandated by § 417(e). Plaintiffs allege that the January 1, 1999 Plan § 5.04(c) defines the interest rate to be used in the calculation of a lump sum as “the lesser of 4% or the ‘applicable interest rate’ specified in Code Section 417(e).” Plaintiffs contend that Plan § 5.04(c) required Duke to apply a 4% interest rate to reduce the age 65 annuity to present value. Plaintiffs allege that instead of using 4% to reduce the future annuity payments to present value, Duke used the “applicable interest rate” specified in § 417(e), which has been higher than 4% since the Plan’s inception. Accordingly, Plaintiffs allege that Duke, by virtue of the terms of the Plan, was required to perform a “whipsaw” calculation in computing the actuarial equivalent of the participants’ accrued benefit. A whipsaw calculation occurs when the interest rate used to project a current account balance to normal retirement date or convert it to an annuity is higher than the interest rate used to discount the annuity back to present day value. See 26 U.S.C. § 411(a)(7)(A)(i); West v. AK Steel Corp., 484 F.3d 395, 400-01 (6th Cir.2007); In re Citigroup Pension Plan ERISA Litigation, 470 F.Supp.2d 323, 334 (S.D.N.Y.2006). For example, consider the following hypothetical: 1) The plan’s normal retirement age is 65; 2) the employee is age 64; 3) the employee’s hypothetical account balance is $100,000; 4) the plan provides for an 8% interest rate to project to normal retirement age; and 5) the plan provides for a 6% rate to discount to present day value. Under those facts, projecting the employee’s account balance to normal retirement age — 65—using an 8% interest rate would yield a sum of $108,000. Using a 6% rate to discount $108,000 to present value yields a sum of $102,000, which is $2,000 more than the employee’s hypothetical account balance. See American Academy of Actuaries, What’s Whipsaw? Why Is It a Problem?, Issue Brief, (February 2003), at http://www.actuary.org/pdfi pension/whipsaw_feb03.pdf. “The lump sum is whipsawed up and down. Id. Therefore, if the plan’s projection rate exceeds the [ ] discount rate, then the present value of the accrued benefit will exceed the participant’s [hypothetical] account balance.” In re Citigroup, 470 F.Supp.2d at 334. Under ERISA, 29 U.S.C. § 1053(a), and the Internal Revenue Code, 26 U.S.C. § 411(a)(2), an impermissible forfeiture results if the larger amount is not paid out. Id. Under the facts of our example, if the employer does not pay the employee $102,000, but instead simply pays the employee the amount of his hypothetical account balance, $100,000, an impermissible forfeiture of $2,000 has occurred. Plaintiffs allege that the interest rate used to convert a Duke cash balance account to an annuity under the 1999 Plan is defined in Appendix A as the “[a]nnual yield on 30-year United States Treasury securities for the month of November pri- or to the beginning of the Plan Year during which the Annuity Starting Date falls.” Plaintiffs further contend that § 5.04(c) of the 1999 Plan provides that the rate for discounting the lump sum distributions to present value is the lesser of 4% or I.R.C. § 417(e). Thus, according to Plaintiffs, the projection interest rate is higher than the Plan’s discount rate and therefore a whipsaw calculation is required. Plaintiffs argue that this claim is technical and factual and will require expert testimony as the case proceeds, as well as factual discovery to disclose how Duke applied the plan terms and performed calculations. Therefore, disposition under Rule 12 is premature. Duke argues that count three should be dismissed because Plaintiffs have failed to allege improper calculations of lump-sum payments. Duke argues that Plaintiffs’ claim in count three rests upon a mistaken understanding on § 5.04(c) of the Plan. Duke contends that § 5.04(c) specifies the interest crediting rate, not the present value discount rate. However, Plaintiffs maintain that § 5.04(c) could only apply to the discount rate because switching from the Treasury bond rate under Appendix A and Plan § 5.04(b) to a lower 4% interest rate for the “interest credit” benefit would constitute an illegal forfeiture. See Berger v. Xerox Corp., 338 F.3d 755, 762-63 (7th Cir.2003). In response, Duke states that § 5.04(c) applies only in limited situations which have never arisen. Duke asserts that § 5.04(c) only applies if the Treasury bond rate falls below 4%. In this circumstance, according to Duke, § 5.04(c) provides that the interest crediting rate used to project the value of the account forward is the same as the Treasury bond rate. With regard to the proposition that § 5.04(c) provides for an illegal forfeiture, Duke argues first that: 1) the Berger decision was decided after the 1999 Plan took effect; 2) despite any illegality, the plain language of the provision cannot be ignored; and 3) because this provision was not applied to the Plaintiffs, they cannot claim any forfeitures. Duke correctly notes that a whipsaw calculation is required only if a cash balance plan’s interest crediting rate is higher than the present value discount rate. Duke maintains that its Cash Balance Plan falls under a “safe harbor” provision, which provides that where a plan’s interest crediting rate is no greater than the applicable interest rate under § 417(e)(3), a distribution equal to the employee’s hypothetical account balance will satisfy ERISA. See IRS Notice 96-8. Duke contends the Plan guarantees interest credits at the average yield on 30-year United States treasury bonds, and the 30-year Treasury bond rate is the present value discount rate specified by § 417(e). Thus, no whipsaw calculation is required. Put simply, Duke argues that because the projection rate and the present value discount rate are the same, any calculation projecting the participants’ hypothetical account balance to normal retirement age, then reducing that amount to present day value, would yield a sum equal to the amount in the participants’ hypothetical account. Accepting Plaintiffs’ allegations as true, however, Plaintiffs have stated a claim of improper lump sum calculations. Section 5.04(c) of the 1999 Plan states: Notwithstanding anything herein to the contrary, if a Participant elects to receive a lump sum distribution prior to his Normal Retirement Date, the Monthly Interest Rate applied for purposes of determining the lump sum distribution shall be the lesser of 4% or the “applicable interest rate” specified in Code Section 417(e) and Treasury Regulation 1.417(e)-IT. [1999 Plan, Docket Entry # 96-7]. Appendix A of the 1999 plan states: 1. For conversions of the Cash Balance Account to a single life annuity and to convert the Duke Power Prior Plan accrued benefit to a lump sum Interest: Annual yield on 30-year United States Treasury securities determined as the average for the month of November prior to the beginning of the Plan Year during which the Annuity Starting Date falls. Id. Plaintiffs interpret these provisions to require that Duke utilize the Treasury Bond rate to convert the cash balance account to a single life annuity and a 4% interest rate to reduce the single life annuity to present value. Additionally, according to Plaintiffs’ interpretation, the use of the higher Treasury Bond rate to project the cash balance account to a single life annuity and the lower 4% rate to reduce the single life annuity to present value requires the use of a whipsaw calculation pursuant to 26 U.S.C. § 411 (a)(7)(A)(i). Count three is indeed technical and will require expert and factual testimony for the court to sort through the parties’ respective allegations with regard to their conflicting interpretations of § 5.04(c) and Appendix A of the 1999 Plan. Although Duke makes some strong arguments for dismissal, the court cannot weigh evidence or defer to Duke’s interpretation of Plan provisions when ruling on a motion for judgment on the pleadings under Rule 12(c). Accordingly, Duke’s motion for judgment on the pleadings with regard to count three is denied. E. Count Four (Improper Interest Rate Credit — 1997 and 1998 Plan Years) Count four alleges that during the 1997 and 1998 Plan years, Duke failed to follow the procedure specified in the Plan for calculating the appropriate interest rate credit. Plaintiffs allege that as a result of this failure, participants who received lump sum distributions or monthly annuity payments did not receive the full amount they were entitled to under the Plan. Plaintiffs further allege that participants who have not yet retired will not receive the full amount of benefits they are entitled to unless the error in calculation is corrected and an appropriate amount credited to their “hypothetical” accounts. Specifically, Plaintiffs allege that Duke utilized provisions in the SPD description for calculating interest rate credits, rather than provisions in the Plan documents. Plaintiffs contend that if Duke used provisions in the Plan documents, participants would have received the full benefits or interest credits to which they were entitled. Plaintiffs seek a declaration that Duke erroneously calculated interest credits during 1997 and 1998 and that such error resulted in the wrongful denial of benefits to retirees. Plaintiffs request that Duke be required to restore any lost benefits resulting from their alleged erroneous calculation of interest credits. Plaintiffs’ claim is based on their interpretation of Plan provisions that describe how the interest factor will be calculated. Based on Plaintiffs’ interpretations, Duke understated benefits during plan years 1997 and 1998. This issue turns on whether provisions in the Plan document control over provisions contained in the SPD. Duke does not dispute Plaintiffs’ interpretations of the Plan provisions; however, Duke maintains that count four should be dismissed because: 1) the Summary Plan Description controls over the Plan provisions; and 2) Plaintiffs have failed to exhaust their administrative remedies. Duke contends that it complied with the terms of the Summary Plan Description, which control over the terms of Plan document. Duke argues that the Fourth Circuit has repeatedly held that “representations in a SPD control over inconsistent provisions in an official plan document.” Martin v. Am. Bancorporation Ret Plan, 407 F.3d 643, 648 n. 13 (4th Cir.2005). The SPD is “the statutorily established means of informing participants of the terms of the plan and its benefits,” and the “employee’s primary source of information regarding employment benefits.” Aiken v. Policy Mgmt. Sys. Corp., 13 F.3d 138, 140 (4th Cir.1993) (quoting Pierce v. Security Trust Life Ins. Co., 979 F.2d 23, 27 (4th Cir.1992)). Accordingly, “if there was a conflict between the complexities of the plan’s language and the simple language of the SPD, the latter would control.” Aiken, 13 F.3d at 140. However, Plaintiffs note that Aiken involved a plan participant who was trying to enforce terms stated in the SPD. The Fourth Circuit held that in order to secure relief pursuant to the terms of the SPD, the ERISA claimant “must show some significant reliance upon, or possible prejudice flowing from, the faulty plan description.” Id. at 141. Plaintiffs argue that the rule as to conflicting SPDs and formal plan documents was generated by the Courts as a means to protect employees from inaccurate summary plan descriptions. In the typical case, Plaintiffs contend, the SPD contains language more favorable to the employee, and the company claims the formal plan controls. In this case, “Duke tries to turn