PepsiCo’s Amendment Changing Interest Rate Didn’t Violate 1997 Plan’s Terms, Court Says

PepsiCo’s deferred compensation plan administrator did not break a contractual promise contained in the 1997 version of the plan when it enacted an amendment in 2007 changing the interest rate used for plan participants who put their deferrals into interest bearing accounts, the U.S. District Court for the Southern District of New York ruled Aug. 9 (Cram v. Pepsico Executive Income Deferral Compensation Program).

Judge Cathy Seibel found that a 1997 version of the PepsiCo Executive Income Deferral Compensation Program gave the plan administrator the authority to amend the plan. Seibel further found that the administrator was authorized ...