Teamsters Central States, Southeast & Southwest Areas Pension Fund, Rosemont, Ill., is being sued by some current and former Kroger Co. participants who want to leave the plan and start a new one, before the Treasury Department acts on the pension fund’s application to reduce benefits.
The plaintiffs, current and retired warehouse workers for Kroger Co., filed a complaint Monday in U.S. District Court in Chicago, arguing that Central States trustees’ refusing to consider an additional plan is a breach of fiduciary duty because it harms participants.
The Teamsters union negotiated a proposal to remove Kroger participants from Central States and create a new plan for Kroger employees, with the company agreeing to absorb the increased withdrawal liability, according to the complaint. Because Central States trustees “flatly refused to consider” after deliberating for just five days, the plaintiffs are asking the court to order reconsideration of the proposal, to appoint an independent fiduciary to judge the idea and to negotiate an arrangement with Kroger. If that doesn’t happen before the existing proposal expires June 15, “the Kroger participants will be trapped in a plan that is about to cut their benefits and still faces likely insolvency,” the complaint said.
Thomas Nyhan, executive director and general counsel at the Central States pension fund, said in an e-mailed statement that the claims by Kroger and the Teamsters union “are without merit. As fiduciaries, Central States’ trustees have a duty to safeguard the retirement benefits of all of our 407,000 participants — not a select few from a particular employer. Central States is prepared to defend against this complaint, and we are confident that Central States will prevail by demonstrating that the trustees’ actions are consistent with their fiduciary duties.”