Citgo Petroleum Corp. has agreed to boost the value of retirees’ pensions by $10 million to resolve a class action alleging the company underpaid early retirement benefits. The lawsuit claimed Citgo used outdated mortality tables, relying on data from the 1970s, to calculate pensions, according to court filings in Illinois federal court.
Citgo Mortality Table Suit : Settlement Details
The retirees filed a motion for preliminary approval of the settlement on Wednesday, marking a major development in the Employee Retirement Income Security Act (ERISA) suit. This motion follows the September report of a tentative agreement between Citgo and the pensioners to end the litigation.
Citgo will add $10 million to the value of the annuities for affected retirees. This increase is calculated as additional present value to their retirement benefits. In addition to the pension boost, the settlement sets aside $4.75 million for attorney fees, expenses, and class representative service awards.
Class Definition and Impact
The settlement covers all plan participants and beneficiaries whose joint and survivor annuity or pre-retirement survivor annuity benefits began between January 1, 1995, and January 1, 2018. These participants received lower payouts due to the use of the outdated mortality tables and interest rates challenged in the lawsuit, according to court documents.
