A Challenge to Actuarial Assumptions in Defined Benefit Plans: Latest Developments in the Legal Landscape

Strafford

Recent Case Law, Claims and Defenses, Fiduciary Obligations, Avoiding Administrative Pitfalls, Plan Modifications

This CLE webinar will provide ERISA counsel and advisers an in-depth analysis of the use of actuarial assumptions in defined benefit plans. The panel will discuss the current litigation landscape and developments in the cases that challenge plan actuarial equivalence factors. The panel will also review critical considerations for plan sponsors and fiduciaries who may be at risk of facing these claims from participants and beneficiaries.

Defined benefit plans use actuarial assumptions when calculating optional forms of benefits (such as joint-and-survivor or certain-and-life annuities) or early retirement benefits, which are typically actuarially equivalent to a single life annuity. Many plans use assumptions that may not reflect current mortality tables or interest rates.

In 2018, plaintiffs began filing lawsuits challenging these actuarial assumptions -- typically the use of an older mortality table -- claiming that the assumptions do not produce actuarially equivalent benefits as required under ERISA. The plaintiffs argue this causes retirees to lose portions of their vested retirement benefits.

Developments in these lawsuits against plan sponsors, such as MetLife and Pepsi, have shed some light on the risks and potential liability associated with the use of older actuarial assumptions. These developments will serve to guide sponsors and their ERISA counsel on whether and what actions to take to address these issues.

Listen as our panel discusses developments in the actuarial equivalence cases, as well as potential defenses to these plaintiffs’ claims. The panel will also discuss possible plan modifications and other critical considerations for plan sponsors and fiduciaries.

Outline:

• Overview of the use of actuarial assumptions in retirement plans
• Fiduciary obligations and liability
• Recent cases and developments
• Best practices for ERISA counsel and plan sponsors

The panel will review these and other key issues:

• The use of actuarial assumptions in retirement plans' calculation of optional forms of benefits
• Recent court cases challenging plans' actuarial assumptions
• Plan sponsor and administrator defenses
• Critical considerations for plan sponsors and administrators

Faculty:

• Katherine B. Kohn, Of Counsel, Groom Law Group
• Brian J. Lamb, Partner, Thompson Hine
• Joshua Shapiro, Senior Actuarial Advisor, Groom Law Group

More Information, How to Register