Watson Wyatt Worldwide agreed to pay $110 million to settle a 2004 lawsuit filed by trustees of the Iron Workers Local #25 pension fund, Novi, Mich., that had accused the actuary of negligence.
The suit, filed in U.S. District Court in Detroit, claimed that Watson Wyatt in May 2002 advised fund officials to make immediate and drastic cuts in benefits to remain financially viable, according to court documents. A subsequent independent actuarial study determined that the $533.8 million pension plan was in worse financial shape than Watson Wyatt had represented, the complaint said. Dennis Kramer, fund administrator, declined to comment.
Emily Rieger, spokeswoman for Watson Syatt, was not able to comment at press time.
The settlement is covered by Watson Wyatts professional liability insurance and will have no impact on the companys financial statements, according to an 8-K filed with the SEC.