Pension Plans of Kellogg, Kohler, FedEx Sued for Outdated Calculations   

Law firm Siri & Glimstad LLP has sued four separate fiduciaries of defined benefit retirement plan sponsors in the past six weeks for allegations of relying on out-of-date actuarial data to calculate pension benefits for participants and beneficiaries, according to court filings.

Each of the four cases are seeking class action status and are pending shortly after a case of similar charges, filed by a separate law firm, was settled for an undisclosed amount.

In the most recent complaint, vested participants of the plan for Kohler Co., a plumbing, kitchen and bath products manufacturer, alleged that fiduciaries of the pension plan shortchanged  participants through the use of outdated mortality tables in violation of the Employee Retirement Income Security Act.

“By using outdated mortality tables to calculate joint and survivor annuities and preretirement survivor annuities prior to January 1, 2021, Kohler Co. harmed the financial security of its former employees and their loved ones, to its financial gain,” plaintiffs’ attorneys from Siri & Glimstad LLP wrote in the complaint. 

The New York-based law firm sued Kohler in U.S. District Court for the Eastern District of Wisconsin, on September 19.  

Siri & Glimstad filed a complaint on September 14 suing food manufacturer Kellogg Company and the Kellogg Company – Bakery, Confectionery, Tobacco Workers and Grain Millers Pension Plan, claiming similar violations.

That filing was made in the U.S. District Court for the Eastern District of Michigan, with four counts of alleged fiduciary breach against each pension plan defendant.   

The cases come after vested participants in the Howard University Employees’ Retirement Plan brought a substantially similar lawsuit on August 18 against the university retirement plan, claiming fiduciaries used outdated mortality tables that shortchanged retirees of their pension benefits. Siri & Glimstad represent the purported class of plaintiffs in that litigation as well—alleging defendants violated ERISA by their reliance on outdated mortality tables. The complaint was filed in the U.S. District Court for the District of Columbia.

Finally, Siri & Glimstad filed a lawsuit on August 19 on behalf of vested plan participants who sued FedEx Corporation and the FedEx Corporation Employees’ Pension Plan, alleging that plan fiduciaries unlawfully shortchanged pilots of the pension plan. That suit was filed in the U.S District Court for the Middle District of Tennessee.

Based on the plans’ Form 5500 data submitted to the Department of Labor, the size of the respective plans are:

• the Kohler Co. Pension Plan held about $1.7 billion in assets under administration for 21,945 participants, as of December 2021;
• the Kellogg Company Bakery, Confectionery, Tobacco Workers and Grain Millers Pension Plan had about $783.1 million in assets under administration for 5,634 participants, as of December 2021;
• the Howard University Employees’ Retirement Plan comprised about $618.5 million in assets under administration for 8,242 participants, as of June 2022 and
• the FedEx Corporation Pension Plan had about $25.4 billion in assets under administration for 203,564 participants, as of May 2022.

On September 15, Milwaukee-based Rockwell Automation agreed to a settlement in a similar case for an undisclosed amount of money, Berube et al. v. Rockwell Automation, Inc et al. was brought in 2019, as represented by Crueger Dickinson, LLC; Izard, Kindall &Raabe, LLP; and Bailey & Glasser, LLP alleging that plan fiduciaries relied on outdated mortality assumptions.  

“There is starting to be a line of these cases now, some resulting in recovery, so it is not surprising that we’re seeing a continuation of the line,” explains Drew Oringer, a partner in and general counsel at the Wagner Law Group, which is not involved in the litigation. “Until the cases start to come up dry, or there’s authority that cuts against recovery, it wouldn’t be surprising if this type of claim increasingly becomes a flavor of the day, whether or not the facts really support a claim.”

A representative for Kellogg media relations says the firm does not comment on pending litigation. The lawsuit is Thomas N. Reichert et al. v. Kellogg Company, the Kellogg Company Pension Plan et al.  

Kohler did not respond to a request for comment. The lawsuit is Danny Holloway et al. v. Kohler Co. and the Kohler Pension Plan.

FedEx also did not respond to a request for comment. The lawsuit is Robert A. Watt et al. v. FedEx Corporation and the FedEx Corporation Employees’ Pension Plan et al.