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Compliance December 8, 2001
COURT COSTS – Ameritech Retirees Shortchanged in Pension Calculation
August 24, 2000 (PLANSPONSOR.com) - A federal court
has ordered Ameritech to pay $175.7 million to 17,000 retired
workers whose lump sum pension benefits were
miscalculated.
Reported by editors@plansponsor.com
The company apparently underestimated how long they would live after retirement.
The workers all retired between January 1, 1994 and prior to July 1, 1999. The U.S. Court for the Southern District of Illinois in Belleville ordered Ameritech to recalculate the retirees’ benefits.
The payments to retirees will start this fall and will range from a few hundred dollars to as much at $30,000. The payments include interest earned at the rate of 5%.
The payments will be taken out of Ameritech’s pension plan, which is overfunded. No current workers’ benefits will be affected.
Ameritech spokesman David Pacholczyk told the Associated Press that the utility settled the case so that it could move on and focus its efforts on serving customers.
Steven Katz, a Belleville, Illinois trial lawyer, and his colleagues who represented the retirees were awarded nearly $51 million by the court.
– Nevin Adams editors@plansponsor.com