Parties Voluntarily Dismiss Case Challenging American Airlines’ DB Plan Calculations

The case applied to several DB plans sponsored by the company and challenged the use of an "inherently unreasonable" mortality table for calculating benefits.

Parties in the lawsuit against American Airlines challenging the mortality table used to calculate defined benefit (DB) plan benefits have file a stipulation for dismissal.

The case against American Airlines applied to several DB plans sponsored by the company. The complaint said American’s use of the UP 1984 mortality table for those plans is inherently unreasonable because of its outdated accelerated mortality rates.

The same two law firms filed similar cases against MetLife and PepsiCo, saying the use of outdated mortality tables in determining annuity payments causes retirees to lose part of their vested retirement benefits. In all three cases, the plaintiffs sought an order from the court reforming the plan or plans to conform to the Employee Retirement Income Security Act (ERISA) and payment of future benefits in accordance with the reformed plan(s).

The case against PepsiCo was similarly voluntarily dismissed in November. That came after a federal judge ruled for the firm and ordered the case closed, then reconsidered and allowed for the plaintiffs to file an amended complaint.

On July 1, the parties in the American Airlines lawsuit filed a notice with the court saying they had reached a settlement agreement. The court directed them to file either a stipulation of dismissal or an agreed motion with corresponding proposed order no later than July 29.

There are no details in the stipulation for dismissal, and with no settlement agreement filed, it is unknown why the parties agreed to have the case dismissed. The stipulation of dismissal was “with prejudice,” meaning it cannot be brought back to court.