Kellogg Wins Pension Lawsuit Dismissal

A federal judge in Michigan this week dismissed a lawsuit against the Kellogg Company, which had been  brought by retirement plan participants of the bakery, confectionery, tobacco workers and grain millers defined benefit plan. 

In the complaint, Kellogg pension plan members Thomas Reichert, Stuart Buck, and Kenneth Henrich alleged the pension had violated the Employee Retirement Income Security Act by relying on outdated mortality tables. The claims were dismissed with prejudice by U.S. District Court Judge Stephen J. Murphy III in the April 17 court order.   

The complaint had alleged that the plan’s “reliance” on the use of outdated mortality tables “when they converted” the litigants’ single life annuities to joint survivor annuities violated ERISA’s actuarial equivalence requirements and that the violation was a breach of fiduciary duty.

The lawsuit, Reichert v. Kellogg Company et al., was filed in the U.S. District Court for the Eastern District of Michigan in September 2023.

Specifically, complainants alleged the Kellogg pension plan violated ERISA and shortchanged vested participant’s benefits, claiming that the outdated data violated ERISA’s actuarial equivalence requirement. ERISA requires qualified joint survivor annuities to be actuarially equivalent to the single-life annuities offered.

Murphy’s order to dismiss wrote that the plaintiffs’ arguments did not apply to the annuities in question.

Citing case law and supporting regulations failed to sway Murphy, who wrote that complainants’ argument applies only to “actuarial equivalence calculations that deal only with lump sum payments,” he wrote.

ERISA “does not require that plans employ certain assumptions or mortality tables, [the regulation] does not impute a ‘reasonableness’ requirement on the actuarial equivalence computation, and unlike the law applicable to a lump sum payment, there is no federal regulation to impute a reasonableness requirement,” explained Murphy.

Reichert filed the amended complaint December 2023; Kellogg submitted the motion to dismiss, January 2024; and a hearing on the motion to dismiss the amended complaint was held March 18.  

The Kellogg Company — Bakery, Confectionery, Tobacco workers and Grain Millers Pension Plan comprised $517,843,448 in retirement assets for 5,505 participants, as of the last filing to the Department of Labor. 

Attorneys with the law firm Siri & Glimstad LLP represent the plaintiffs. Attorneys with law firm Jenner & Block LLP and Miller Johnson represent the defendant.

Representatives of the attorneys for the plaintiffs did not respond to a request for comment. Representatives of the attorneys for the defendant declined to comment.