August 4, 2021
Retired employees in two pension plans operated by Citgo Petroleum Corp. have sued the company, the pension plans and fiduciaries saying they were shortchanged in their retirement benefits.
The plaintiffs, seeking class-action status, allege they and other pensioners were harmed because the Citgo pension plans used out-of-date actuarial tables to calculate retirement benefits.
“Plaintiffs and class members receive pension benefits in the form of a joint and survivor annuity — a benefit that pays an annuity both to the participant for his life and for the life of the participant’s surviving spouse,” said the complaint filed Tuesday in a U.S. District Court in Chicago.
“In determining the amount of plaintiffs’ and class members’ joint and survivor annuities, however, defendants employed actuarial assumptions 50 years out of date,” according to the complaint.
Plaintiffs argued that this calculation meant pensioners “receive less than the ‘actuarial equivalent’ of their vested accrued benefit, contrary to ERISA,” said the complaint in the case of Leslie Urlaub and Mark Pellegrini vs. Citgo Petroleum Corp. et al.
The alleged shortchanging affects people who retired before Jan. 1, 2018, the complaint said
“Defendants appear to have recognized that these actuarial assumptions did not pass muster,” the lawsuit said.
“Effective January 1, 2018, they amended the plan to ensure that for those commencing benefits after January 1, 2018, the Plan employs updated and reasonable actuarial assumptions,” the lawsuit said. “But for people who began receiving benefits before 2018, defendants continue to employ punitive, unreasonable and severely outdated assumptions, which result in the class receiving less than their full pensions.”
The complete article can be viewed here.