ERISA Litigation Roundup: Mortality Table Pension Plan Litigation – Reasonableness Not Required

When determining alternative pension benefits (such as joint and survivor annuities and early retirement benefits), a recent court decision held that underlying actuarial assumptions selected decades ago do not violate federal law simply because they are outdated and may result in a pension benefit that is less than using more current actuarial assumption.

A retiree brought a class action against his former employer, Partners HealthCare System, Inc. (Partners), alleging that the early retirement joint and survivor annuity benefits from Partners’ defined benefit pension plan could not be actuarially equivalent to the plan’s single life annuity because it used inflated interest rates and outdated mortality tables to calculate these alternate benefits. The claim alleged that the Partners’ plan used a 1951 Adjusted Mortality Table and interest rate of 7.5% and that the use of such dated actuarial assumptions was unreasonable under applicable law. Partners moved to dismiss the complaint for lack of standing and failure to state a claim. The court declined to dismiss on standing grounds, converted the motion to dismiss to a motion for summary judgment and then granted the motion in favor of Partners.

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About Author: Gregory Ossi

Gregory Ossi resolves labor law issues and ERISA-related litigation matters for clients in the energy production, mining, government contracting, hospitality, manufacturing and construction industries. Greg counsels employers on a broad range of labor and employee benefits matters, such as collective bargaining, mergers and acquisitions, union organizing and retiree health care with an emphasis on multiemployer pension withdrawal liability. He also has extensive experience negotiating retirement and health care plans pursuant to collective bargaining agreements. View all posts by

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