May 23, 2024
“We are very pleased the court granted class certification to more than 1,700 CITGO employees and pensioners in this important ERISA case,” one of the plaintiffs’ counsel, Michelle C. Yau, chair of Cohen Milstein’s ERISA practice, said in a statement. “This ruling and the court’s recent order denying summary judgment pave the way for the class claims to move forward to trial and affirm our confidence that our clients will prevail.”
What You Need to Know
- Over 1,700 retirees are now a certified class in a complaint filed against CITGO Petroleum Corp.’s pension plans.
- The plaintiffs filed the suit alleging the company violated failed to failed calculate joint and survivor annuity benefits for retired employee.
- The estimated recovery underpayments could total over $30 million, according to the plaintiffs.
A federal judge in Chicago recently certified a class of over 1,700 members and beneficiaries against CITGO Petroleum Corp., after rejecting the fuel company’s summary judgment motion in a suit alleging it underpaid pension plans by upwards of $31 million.
U.S. District Judge Matthew F. Kennelly’s ruling will allow the plaintiffs’ case to move forward to trial against the gas and energy giant, alleging it violated the federal Employee Retirement Income Security Act by it imposing a “marriage penalty” on pension plans’ joint and survivor annuity recipients.
. . .
“We are very pleased the court granted class certification to more than 1,700 CITGO employees and pensioners in this important ERISA case,” one of the plaintiffs’ counsel, Michelle C. Yau, chair of Cohen Milstein’s ERISA practice, said in a statement. “This ruling and the court’s recent order denying summary judgment pave the way for the class claims to move forward to trial and affirm our confidence that our clients will prevail. Married retirees and their beneficiaries deserve to receive accurate pension payments after years of hard work and should not be shortchanged or subjected toa ‘marriage penalty.’”
Yau told Law.com that CITGO recognized it was underpaying its retirees in 2018 when it amended its pension plans to use updated mortality assumptions. The company, however, only fixed the issues for its former employees who retired after 2018, which left behind all retirees who had previously started their pension.
. . .
Yau said these issues have resulted from employers not having their pension plans compliant with the law and failing to update their mortality assumptions in the last 50-plus years. The shortcomings on these pensions led to spousal pensions for married retirees to diverge significantly than what the law requires. She also said potentially hundred of thousands of retirees could be affected in these cases, with her case involving AT&T having more than 38,000 retirees and including underpayments that could exceed $700 million.
“Our clients and other class members are retirees who are typically on a fixed income,” she said. “Over the course of their retirement, the monthly shortfall adds up, making it harder for them to pay for living expenses, which are getting more expensive with inflation.”
. . .
The plaintiffs are also represented by Cohen Milstein Sellers & Toll in New York; Nina Wasow and Todd F. Jackson Feinberg, of Jackson Worthman and Waso in Berkeley, California; John R. Stokes, Peter K. Stris, Rachana A. Pathak and Victor A. O’Connell, of Stris & Maher; and Shaun P. Martin, of the University of San Diego Law School.
Read Federal Judge Certifies Class Action Claiming $31M in CITGO Pension Underpayments.