A U.S. Court of Federal Claims judge on Monday approved class certification for a lawsuit filed by a group of retirees participating in the New York State Teamsters Conference Pension and Retirement Fund, Syracuse, against the federal government for approving a benefit reduction plan under the Kline-Miller Multiemployer Pension Reform Act of 2014.
In the court filing on Monday, Judge Richard A. Hertling said all five requirements for class certification were met, one of which was that the class is "sufficiently numerous."
The original lawsuit was filed in July 2018 by three retirees in the union pension fund, which proposed to represent a class of 22,000 retirees in the fund who had started receiving reduced benefits on Oct. 1, 2017.
The Treasury Department had approved the pension fund's MPRA application because less than 50% of participants voted against the action. The law requires a "no" vote of more than 50% to stop a benefit reduction action. While 9,788 participants voted against the plan and only 4,081 voted for it, another 20,767 did not vote, leaving only 28.26% of the total vote opposed.
At the time of approval, New York State Teamsters Conference Pension and Retirement Fund was the third multiemployer fund to receive approval for benefit cuts. As of Jan. 1, 2020, the fund had $1.54 billion in assets and $2.73 billion in liabilities for a funding ratio of 56.4%, according to its most recent Form 5500 filing. Three years earlier, before the Treasury Department approved the benefit cuts, the plan's funding ratio was 37.8%.
The U.S. Court of Federal Claims in Washington hears claims of regulatory takings by the federal government. The lawsuit is asking that the federal government reimburse the retirees for 29% benefit cuts.
"The Court of Federal Claims tends to be clear-eyed and thoughtful about whether a taking occurred. The government authorized a pension plan to withhold my clients' money and to give it to people other than them. That's a taking," said Noah Messing, plaintiff counsel from Messing & Spector, in a July 2018 interview. Mr. Messing could not be immediately reached for further comment.
