In a lawsuit that’s as perplexing as a maze, Thomas Reichert, a former employee of the cereal titan, alleges that Kellogg’s Pension Plan and its subsidiary, the BCTGM plan, haven’t been playing by the rules. The core of the issue? Using bygone methods to calculate retirees’ pensions, which Reichert claims is a blatant breach of the Employee Retirement Income Security Act (ERISA).
“Imagine calculating today’s speed with yesterday’s tools,” Reichert noted, emphasizing that using these outdated tools has stripped retirees of financial security, lining Kellogg’s pockets in the process.
Reichert’s association with Kellogg’s isn’t fleeting. With 11 years under the brand, the man knows his oats. Starting his retirement benefits in June 2019, he opted for the 50% Joint and Survivor Annuity (JSA), which essentially means the amount he receives is slightly less than what he’d get if he were single. This is where the plot thickens.
The JSA amount is derived using formulas encompassing interest rates and a mortality table. But as life expectancy has soared in recent times, Kellogg’s continues to use archaic mortality tables. In simple terms? Less money for retirees every month.