Skip to main content
MENU
Subscribe
  • Login
  • My Account
  • Logout
  • Register For Free
  • Subscribe
  • Topics
    • Alternatives
    • Artificial Intelligence
    • CIOs
    • Consultants
    • Defined Contribution
    • ESG
    • Face to Face
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Partner Content
    • Private Credit
    • Pension Funds
    • Private Equity
    • Real Estate
    • Regulation
    • Special Reports
    • Washington
    • White Papers
  • International
    • U.K.
    • Canada
    • Europe
    • Asia
    • Australia - New Zealand
    • Middle East
    • Latin America
    • Africa
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Influential Women in Institutional Investing 2024
    • Eddy Awards
  • Resource Guides
    • Active Thematic Global Equities
    • Retirement Income
    • Fixed Income
    • Pension Risk Transfer
    • Pooled Employer Plans (PEPs)
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • ESG Investing | Industry Brief
    • Innovation in ESG Investing
    • ESG Rated ETFs
    • Divestment Database
  • Defined Contribution
    • Latest DC News
    • The Plan Sponsor's Guide to Retirement Income
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • DC Plan Design: Improving Participant Outcomes
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Research Center
    • The P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
  • Print
Breadcrumb
  1. Home
  2. COURTS
February 06, 2020 03:47 PM

Fiduciary violations, underpayments at center of UPS suit

Plaintiffs allege outdated mortality tables resulted in reduced benefits to retirees

Robert Steyer
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Getty Images

    Former UPS employees have sued the company alleging that its use of outdated mortality tables for calculating benefits underpaid retirees.

    Former employees of United Parcel Service of America Inc. have sued the company and two UPS pension plans alleging that their use of out-of-date mortality tables for calculating benefits underpaid retirees and violated their fiduciary duties under ERISA.

    The two UPS defined benefit plans use 1983 mortality data to calculate retiree benefits, which fails to account for people living longer and thus leads to reduced benefits, the lawsuit said.

    "By using outdated mortality assumptions, UPS materially reduces the monthly benefits the participants and beneficiaries receive in comparison to the monthly benefits they would receive if UPS applied updated, reasonable mortality assumptions," said the complaint filed by three UPS retirees on Jan. 31 in a U.S. District Court in Atlanta. They are seeking class-action status for their complaint.

    The plaintiffs wrote that UPS exacerbated the alleged calculation problem "by using a male-only (mortality) table for participants, which does not account for males' greater improvements in mortality over the past 40 years relative to females."

    To illustrate their argument, the plaintiffs wrote that a 65-year-old male had an average life expectancy of 16.7 years based on the 1983 mortality table and a 65-year-old female had an average life expectancy of 21.3 years.

    Using an updated 2014 table, a male's life expectancy was 21.6 years after age 65 and a female's life expectancy was 23.8 years after age 65.

    "Accordingly, the average retiring employee would have expected to receive, and the average employer would have expected to pay, benefits for a substantially longer period of time," said the complaint filed in the case of Brown et al. vs. United Parcel Service of America Inc. et al.

    "We will vigorously defend ourselves, and continue to provide industry-leading compensation packages for our employees," Matthew O'Connor, a company spokesman wrote in an email.

    "UPS offers competitive compensation packages and uses factors that are common to many similar benefit plans across the country to calculate those benefits," he wrote." These factors are reasonable and comply with all applicable laws."

    The plaintiffs wrote that UPS officials "knew or should have known" that the mortality tables used to calculate retirees' benefits "were outdated and unreasonable" because the company applies updated mortality tables to its financial statements.

    UPS used "reasonable actuarial assumptions to report a greater liability for benefits than it was paying out using the unreasonable" 1983 mortality table for retirees, they wrote.

    "There is no reasonable justification for defendants to use old mortality tables that presume an early death and an early end to benefit payments to calculate an unfairly low annual benefit for participants, while at the same time using a reasonable mortality table to project a longer duration of these very same annual benefit payments for annual financial reporting," they wrote.

    "Since these two analyses measure the length of the very same lives and the very same benefit streams, they should use the same mortality assumptions," they wrote.

    The UPS lawsuit is similar to a series of lawsuits that have been filed against large U.S. employers since December 2018, including Metropolitan Life Insurance Co., American Airlines Inc., U.S. Bancorp, Raytheon, Huntington Ingalls, and Anheuser-Busch.

    Related Articles
    Society of Actuaries releases new mortality tables for private pension funds
    Raytheon sued over mortality tables used to calculate pension benefits
    Huntington Ingalls sued over mortality tables used to calculate pension benefits
    Recommended for You
    gavel court justice books 750_i.jpg
    Kaiser Foundation Health Plan wins dismissal of lawsuit over forfeited 401(k) funds
    Outside of Supreme Court building.
    Supreme Court asks for more information about dispute over benchmarks in retirement plan lawsuits
    Gavel on top of a stack of hundred dollar bills.
    Intuit agrees to rare settlement in 401(k) plan forfeiture lawsuit
    Sponsored
    White Papers
    The State of Lifetime Income Report
    The Next Wave of LDI Evolution
    Retirement security to future income wins, TIAA brings you the latest financial…
    U.S. Public Funds Top Performers: Q2 2024
    Generative AI Investing: Opportunities at a Key Tech Inflection Point
    Research for Institutional Money Management: Advancing Physical Risk Modelling,…
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    October 23, 2023 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Custom Content
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2025. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Artificial Intelligence
      • CIOs
      • Consultants
      • Defined Contribution
      • ESG
      • Face to Face
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Partner Content
      • Private Credit
      • Pension Funds
      • Private Equity
      • Real Estate
      • Regulation
      • Special Reports
      • Washington
      • White Papers
    • International
      • U.K.
      • Canada
      • Europe
      • Asia
      • Australia - New Zealand
      • Middle East
      • Latin America
      • Africa
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Influential Women in Institutional Investing 2024
      • Eddy Awards
    • Resource Guides
      • Active Thematic Global Equities
      • Retirement Income
      • Fixed Income
      • Pension Risk Transfer
      • Pooled Employer Plans (PEPs)
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • ESG Investing | Industry Brief
      • Innovation in ESG Investing
      • ESG Rated ETFs
      • Divestment Database
    • Defined Contribution
      • Latest DC News
      • The Plan Sponsor's Guide to Retirement Income
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • DC Plan Design: Improving Participant Outcomes
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Research Center
      • The P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
    • Print