Articles Posted in Pension

Kantor & Kantor Partner Elizabeth Hopkins filed an Amicus Brief in the Supreme Court on September 18, 2019 for The Pension Rights Center in support of the petitioners in Thole v. U.S. Bank, N.A.  The case is about funding in defined benefit pension plans, constitutional standing, and when participants in these plans may sue to recover plan losses.

Please see the brief here: Thole v. U.S. Bank, N.A. Amicus Brief

For questions on the handling of your Pension benefits, please do not hesitate to contact Kantor & Kantor for a no-cost consultation at (800) 446-7529 or use our online contact form.

 

DowDuPont merger attempts to thwart DuPont’s promised pensions to employees that helped build the company.

Kantor & Kantor lawyers are representing U.S. retirees of E. I. du Pont de Nemours and Company in a class action lawsuit after a series of corporate maneuvers taken by the company over the last four years left workers’ retirement benefits in jeopardy of failing. Elizabeth Hopkins and Susan Meter are representing the proposed class action along with co-counsel.

W. Daniel “Dee” Miles, III, head of Beasley Allen’s Consumer Fraud Section, is one of the co-counsel working with our firm on the case. “Workers for DuPont have given decades of their working lives to the company to secure a pension for retirement that they were promised. These companies are now attempting to find ways to not only avoid funding the plan, but also are placing it in jeopardy of failing, leaving the workers with little or no pension after a lifetime of savings,” Miles said.

In an intensely litigated ESOP case involving 14 counts of ERISA violations, on April 22, 2019, Judge Staton, District Judge, Central District of California, certified a class of ESOP participants. The certification came after the court denied Defendants’ motions to dismiss all 14 counts. The case, as a whole, has many interesting legal issues, however, most interesting is the continued litigation of whether indemnification agreements for breaches of fiduciary duty are void.

As background, ERISA § 410 categorically voids indemnification agreements and states, in part “any provision in an agreement…which purports to relieve a fiduciary from responsibility or liability for any responsibility, obligation, or duty…shall be void as against public policy.” However, Department of Labor regulations have interpreted this to permit employer indemnification but not plan indemnification. (29 CFR 2509.75-4). The regulations also permit indemnification agreements so long as it does not relieve a fiduciary of responsibility or liability.

In 2009, we heard the first case in the 9th circuit that interpreted ERISA § 410 and its regulations, giving some clarity on the validity of indemnification agreements. In Johnson v. Couturier, 52 F.3d 1067 (9th Cir. July 27, 2009) the ESOP participants alleged defendants breached their fiduciary duties by allowing the company to pay excessive compensation to an officer who was a fiduciary to the plan. The company in Johnson was 100% ESOP owned and was in the process of liquidation. The indemnity agreement between officer-fiduciary and plan sponsor (company) provided indemnity unless due to gross negligence or deliberate wrongful acts. Despite the indemnity being paid from corporate assets, which would typically be permitted under DOL regulations, here, because the company was liquidating, the Court held that payment of indemnification by the company would reduce, dollar-for-dollar, the liquidating distribution from the plan – essentially paid by ESOP.

Your claim for pension benefits has been approved! A check came in the mail from your pension plan. You open it, look at the amount of your monthly benefit, and wonder how the dollar amount was calculated. You shrug and deposit the check, assuming the pension plan has correctly calculated what you are entitled to receive. But is it correct?

Although you may think calculating the amount of your monthly pension benefit is a simple matter of plugging some numbers into an equation based on the language in the pension plan, there are multiple ways a plan administrator can make an error when calculating the amount. According to the Department of Labor, the top ten most common errors made when calculating pension benefits are:

  1. The plan did not include all your relevant income when calculating the benefit amount. One of the variables used to calculate pension benefits is pre-retirement earnings. The higher your earnings were when you were working, the higher the amount of your pension benefit. However, if the pension plan mistakenly excludes some of your compensation – such as bonuses, commissions, or overtime – your benefit may be smaller than it should be.

An amended complaint filed March 29 in Bafford, et al. v. Northrop Grumman Corp., et al., alleges that Northrop Grumman and its outside administrator, Hewitt Associates LLC (now known as Alight Solutions LLC), violated federal and state law by persistently overstating the pension benefits earned by certain Northrop Grumman employees.

Plaintiffs Stephen Bafford and Evelyn Wilson each worked for Northrop Grumman in the 1980’s and 1990’s, then worked for TRW Corporation, and then returned to Northrop Grumman employment when Northrop Grumman acquired TRW in 2002. For years before each Plaintiff retired from Northrop Grumman, the Defendants provided them with pension benefit statements that showed their pensions being calculated on the basis of their highest three years of pay from their second period of Northrop Grumman employment.

But in early 2017, Defendants notified each Plaintiff that their pensions would be reduced by more than 50 percent because the pensions should have been calculated based on earnings from each Plaintiff’s first period of Northrop Grumman employment. Defendants further demanded repayment of pension amounts already paid to Plaintiffs, including more than $35,000 demanded from Ms. Wilson.

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