Talen Energy has agreed to settle a complaint by former employees who accused the company of shortchanging their pension benefits after they were forced into early retirement.
The agreement in principle, signed by attorneys representing plaintiffs and defendants, didn't provide terms to the U.S. District Court in Allentown, Pa., which must approve the settlement.
Details are expected in October, according to the settlement notice filed Sept. 8 in the case of Durnack et al. vs. Retirement Plan Committee of Talen Energy Corp. et al., according to the agreement in principle. The tentative agreement was reached with the aid of a mediator in the lawsuit that was filed in November 2020.
The plaintiffs had worked for the power supply business of Pennsylvania Power and Light, which was spun off in a 2015 private equity transaction to form Talen Energy.
After the spinoff, Talen Energy forced the plaintiffs to retire early, according to court documents. Under the terms of the early retirement agreement, participants were entitled to unreduced early retirement pension benefits, the plaintiffs argued.
According to the original complaint, Talen concealed and misrepresented their obligations to pay these benefits. The suit argues that each named plaintiff is owed between $325,000 and $427,000 in pension benefits. The plaintiffs were seeking class-action status.
The Talen Energy Retirement Plan, The Woodlands, Texas, had $910 million in assets as of June 30, 2022, according to its latest Form 5500.