Northrop Grumman Settles ERISA Case Over Pension Estimates

Northrop Grumman Corp. has agreed to settle a protracted legal case brought by retirees alleging Employee Retirement Income Security Act violations for allegedly misinforming pension participants about their promised benefits, according to court documents.

The documents state that the settlement agreement was reached on October 24 and is anticipated to be finalized in two months.

The case, Stephen H. Bafford et al. v. Northrop Grumman Corp. et al, was filed in U.S. District Court for the Central District of California in December 2018 against Northrop Grumman and Hewitt Associates LLC (now Alight Solutions), claiming violations of fiduciary duties under ERISA. Alight was dismissed from the case in 2022 and did not participate in the appeal.

The original complaint accused the defendants of failing to provide pension benefit statements or adequate notices on how to obtain them and claimed that inaccurate benefit statements were issued in response to written requests.

The plaintiffs alleged that Alight had breached its fiduciary duty by providing incorrect estimates of pension benefits and accused the Northrop Grumman administrative committee of not sufficiently overseeing Alight.

In 2019, the district court granted the plan committee’s motion to dismiss. The U.S. 9th Circuit Court of Appeals upheld the dismissal of the fiduciary duty claims but reversed the dismissal of state law claims and ERISA disclosure claims, remanding the case to the lower court for the plaintiffs to file an amended complaint.

Upon returning to the district court, the plaintiffs submitted a second amended complaint, reasserting state-law claims and allegations against the committee for failing to meet ERISA’s disclosure requirements. The district court subsequently narrowed the allegations, dismissing one claim with prejudice while allowing amendments to other claims.

When the plaintiffs filed a third amended complaint, the court required them to remove previously rejected accusations. Ultimately, the court struck a fourth amended complaint focused on allegations of inaccurate pension statements and overly broad claims.

Rather than amend again, the plaintiffs sought a final judgment and initiated this appeal, which was argued and submitted on October 17, 2023. The 9th Circuit ultimately revived the case for a second time in May 2024, and a bench trial was later scheduled for October 2026. The settlement agreement will effectively end the complaint without the need for a bench trial.

Northrop Grumman is represented by attorneys with the law firm Mayer Brown LLP. The retirees are represented by attorneys with the law offices of Kantor & Kantor LLP and Renaker Scott LLP.