The proposed class of plaintiffs alleges Citgo is using mortality assumptions that are at least 50 years out of date while converting from a pension plan’s standard annuity benefit to alternative options.
The retirees’ main claim is that the plan’s use of mortality tables from 1971 and 1983 to convert default retirement benefits into the alternative benefits that they opted to receive constitutes unreasonable actuarial assumptions.
Allegations in the underlying lawsuit match those included in an emerging class of cases filed against large employers across the United States.
The defense has prevailed on technical grounds in a lawsuit that argues plan sponsors should be required to use fresh mortality and interest rate assumptions when converting between the standard and alternative forms of annuities to be paid out by a pension plan.
Several interim rulings have been handed down in the case, which asks some key questions about the meaning of the term ‘actuarial equivalence’ in the context of ERISA litigation.
Club Vita teamed up with Mercer to develop a proprietary model, VitaCurves, that uses the nine-digit ZIP code to help defined benefit (DB) plan sponsors more accurately make longevity assumptions.
An aggregate enhanced data set will be used by Mercer's consulting teams to provide more powerful insights to help with client decision making.
The complaint suggests MetLife is failing to meet its obligations to ensure different annuity options offered to pension plan participants are actuarially equivalent default benefit, as required under ERISA.