A former flight attendant has sued Delta Air Lines Inc. and its fiduciaries, alleging that incorrect calculations of pension benefits caused her and other retirees to be short-changed.
The complaint said Delta's benefit calculation formulas — called conversion factors — for different types of retirement benefits are "materially lower" than required by ERISA.
"Delta is causing plaintiff and class members to receive less than they should as a pension each month, which will continue to affect them throughout their retirements," said the complaint in the case of Marsha DuVaney vs. Delta Air Lines Inc. et al.
The complaint was filed Dec. 10 in a U.S. District Court in Las Vegas. Ms. DuVaney is a resident of Henderson, Nev.
She filed the suit in Nevada because, as her complaint stated, Delta does business in the state. The company's headquarters is in Atlanta.
Ms. DuVaney is a participant in the Contract Plan, a defined benefit plan for union members established by Northwest Airlines Corp. in 1970, covering all Northwest employees before Oct. 1, 2006. Delta assumed responsibility for the plan after merging with Northwest in 2008. All participants in this plan are former employees of Northwest, spouses of former employees, or other beneficiaries, the complaint said.
Ms. DuVaney's complaint is seeking class-action status for members of her DB plan as well as for members of other DB plans covering former Northwest employees, arguing that Delta's calculations harmed them, too.
"The plans improperly reduce annuity benefits for participants" who receive several types of benefit payouts at a rate that is "below the benefits that they would receive if those benefits satisfied ERISA's actuarial equivalence requirements," the complaint said.
The lawsuit accused Delta and its fiduciaries of "using unreasonable conversion factors that are likely based on antiquated actuarial assumptions resulting in benefits that do not satisfy ERISA's actuarial equivalence requirements." These actions resulted in participants and beneficiaries" illegally forfeiting and losing vested benefits in violation of ERISA," the complaint said.
A representative for Delta did not immediately reply to a request for comment on Friday.