Five people, including two senior executives, are suing a Texascredit union they retired from for discontinuing promised lifetimeretirement benefits, accusing their former employer of violatingfederal laws and fraud.

The $347 million Union Square Credit Union in Wichita Falls,Texas, however, is denying it broke federal laws or defrauded theretirees and has asked a federal judge to dismiss the case.

In a civil lawsuit filed at U.S. District Court in Dallas lastmonth, retirees Judy Hawthorne, John Christoff, Sue Moss, CharlotteFoster and Marsha Johnson alleged that Union Square CU made“multiple oral and written representations and promises” that theywould receive retirement benefits for life and that they also setaside money to fund their retirement benefits.

Just before she retired in 2008, Charlotte Foster, who worked atthe credit union for 38 years and served as its vice president ofoperations, specifically asked her supervisors, Jeff Fladu andPresident/CEO John Barad, whether this retirement benefit would beavailable for life and they both confirmed it would be, accordingto the lawsuit.

The other retirees received similar assurances. Moss, who served37 years, was an assistant vice president in lending; Johnson, whoworked at the credit union for 34 years, served as an assistantvice president and loan officer; Hawthorne had 40 years of serviceand was assistant vice president, corporate secretary and leasingmanager; and Christoff with 35 years of service was anEVP.

The lawsuit also claims the retirees were “induced to retire inreliance upon these oral and written representations.” They allretired before March 2009. The retirees received a notice from thecredit union in September 2015 that their retirement benefits wouldbe canceled on Dec. 31, 2015.

In April 1988, the credit union established a retirement planthat provides money for life to pay retired employee’s premiums forlife insurance, dental coverage and group health coverage. Some ofthe retirees who are suing Union Square CU also helped create andimplement the retirement plan. The retirement benefits weregoverned by the plan, which essentially consisted only of a policyin the company handbook, according to the lawsuit.

The lawsuit alleges that the credit union violated terms of theretirement plan under the Employee Retirement Income Security Actof 1974. The retirees also claim that the acts of the credit unionwere fraudulent because it made false materialmisrepresentations.

In addition to denying all of the allegations made by theretirees, Union Square CU has asked a federal judge to dismiss thecivil complaint.

The credit union argues that the retirees’ lawsuit should bedismissed because its retirement plan was not an ERISA plan.

“Defendant respectfully submits … that this lawsuit should bedismissed because no facts are alleged in the complaint that wouldplausibly or possibly permit the conclusion or even the reasonableinference that defendant’s retirement policy was an ERISA plan,”according to the credit union’s request to dismiss.

Union Square CU argued its retirement plan was not subject toERISA rules because of a 1987 U.S. Supreme Court ruling that saidfor a company’s retirement plan to be regulated by ERISA, it musthave “an ongoing administrative program to meet the employer’sobligation.” Union Square pointed out in court documents that itsretirement plan did not have an ongoing administrative program.

Union Square CU also asked a federal judge to dismiss the fraudallegation because it lacked specificity.

“Plaintiffs’ complaint fails to allege statements that wereallegedly fraudulent, who made them and when, where and howdefendant made them,” the credit union stated in court documents.“The complaint simply states legal conclusions withoutdemonstrating how any supporting facts would apply to thoseconclusions.”

The retirees are asking a federal judge to pay the benefits thatwere wrongfully held.