Duke University has agreed to a $2.35 million settlement in a proposed class action accusing the school of shortchanging retirees by relying on decades-old mortality data to calculate pension benefits, according to a North Carolina federal court filing.

The case, led by retiree Joy Franklin, alleged Duke’s reliance on outdated assumptions deprived former employees of millions. Franklin urged the court Monday to certify a settlement class and approve the agreement, arguing that a guaranteed payout outweighed the uncertainty of continued litigation.

Arbitration Fight Nearly Changed Course

The settlement arrived just weeks before the Fourth Circuit was scheduled to hear Duke’s appeal to push the case into arbitration. Judge Catherine C. Eagles had previously denied the university’s arbitration bid, ruling that Franklin was never informed that arbitration clauses were added during a 2021 amendment to the plan.

Franklin told the court that the early legal battle over arbitration posed serious risks and made compromise the most pragmatic path forward.

How the Settlement Works

Under the deal, the $2.35 million fund—about 18% of estimated damages—will be distributed among roughly 720 retirees and beneficiaries through permanent increases in monthly pension payments.

On average, participants will see an extra $14 a month for life, with nearly half receiving at least $10 more each month. Franklin emphasized that these increases are not one-time checks but ongoing lifetime boosts that extend to surviving spouses as well.

The agreement also provides Franklin a $5,000 service award for representing the class and allows her attorneys to claim up to $775,500 in fees.

Claims of Financial Harm

Franklin, who began receiving benefits in 2018, said Duke’s outdated tables cut her monthly pension by $64, leading to losses of more than $10,000. She filed suit in 2023, alleging Duke ignored modern mortality data and interest rates until it revised the plan on July 1, 2023.

While the plan was eventually corrected, Franklin argued retirees like her continued to suffer diminished payments.

Settlement Before Appeals Court Review

Duke had appealed, arguing that under ERISA, plan sponsors have broad leeway to amend retirement plans, including arbitration clauses. But the settlement preempted the Fourth Circuit’s review, closing the case before Duke’s arguments could be tested on appeal.

Counsel on Record

Franklin is represented by Oren Faircloth and Dana Smith of Siri & Glimstad LLP.

Duke is represented by Jeremy P. Blumenfeld, Mary Ann F. McNulty, Michael E. Kenneally, and Abbey M. Glenn of Morgan Lewis & Bockius LLP, along with Dixie T. Wells of Ellis & Winters LLP.