The Colgate-Palmolive Co. came to a $332 million settlement in a case originally filed in 2016 by former employees who alleged pension plan executives miscalculated their payments, according to an August 29 filing in U.S. District Court for the Southern District of New York.
The settlement in McCutcheon et al. v. Colgate-Palmolive Co. et al. covers 1,177 employees who would share about $232.7 million after lawyers’ fees and expenses are deducted. The settlement awaits a judge’s approval.
The reward is slightly higher than an expected $300 million payout following a district court ruling in favor of the plaintiffs in 2020.
The case had origins as far back as 1989, when Colgate converted its pension plan to a cash balance plan, a type of pension plan that works like a defined contribution plan, since participants receive a set percentage of their yearly compensation plus interest, and the accounts are maintained individually.
As a result of the switch, Colgate’s participants received benefits in lump sums. According to the court filing, in 2005, Colgate retroactively awarded annuity payments to participants who received lump sums but had not yet received their full promised pension benefits. The plaintiffs argued that Colgate calculated those payments incorrectly.
Litigation followed in 2007, with the settlement based on a complaint filed in 2016. The parties agreed to settle on June 5 before coming to terms in late August.
For more stories like this, sign up for the CIO Alert newsletter. ?
The plaintiffs were represented by Gottesdiener Law Firm PLLC and Siri & Glimstad LLP. The defendants were represented by Morgan, Lewis & Bockius LLP and Cravath, Swaine & Moore LLP.
The Colgate-Palmolive Co. Employees’ Retirement Income Plan had 8,410 participants with more than $1.4 billion in assets as of year-end 2023, according to its most recent Form 5500 filing.
Tags: Colgate-Palmolive, complaint
#ColgatePalmolive #Longstanding #Pension #Calculation #Case #Settles #332M