Fiduciary violations, underpayments at center of UPS suit


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Fiduciary violations, underpayments at center of UPS suit - Pensions and Investments

Plaintiffs allege outdated mortality tables resulted in reduced benefits to retirees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of United Parcel Service of America Inc. have sued the company and two UPS pension plans alleging that their use of out-of-date mortality tables for calculating benefits underpaid retirees and violated their fiduciary duties under ERISA.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"By using outdated mortality assumptions, UPS materially reduces the monthly benefits the participants and beneficiaries receive in comparison to the monthly benefits they would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.