Manning v. EIDP, Inc. et al

On March 13, 2023, James M. Manning (“Plaintiff”), represented by Carmella P. Keener of Cooch and Taylor, P.A. and Robert A. Izard, Douglas P. Needham, and Christopher M. Barrett of Izard, Kindall & Raabe LLP, filed a labor lawsuit against EIDP, Inc. f/k/a E.I. du Pont de Nemours and Company (“DuPont”), the Administrative Committee of the DuPont Pension and Retirement Plan (the “Committee”), and the Committee’s members (collectively, “Defendants”), seeking declaratory relief for alleged breach of fiduciary duty by the defendants. This case was filed in the U.S. District Court for the District of Delaware, with Judge Maryellen Noreika presiding.

In the complaint, the plaintiff alleged, “DuPont sponsors the Plan. Under Title I of the Plan, participants earn pension benefits in the form of a single life annuity (‘SLA’). An SLA provides participants with monthly payments for the rest of their lives when they retire. Participants can also select an SBO, which is the Plan’s terminology for a joint and survivor annuity. A joint and survivor annuity provides monthly payments for the participant’s life with a contingent annuity payable to the participant’s spouse for the rest of the spouse’s life. Joint and survivor annuities are expressed as a percentage of the amount paid during the participant’s life.”

The plaintiff further alleged, “ERISA limits the extent to which a plan can reduce a participant’s joint and survivor annuity benefits below a participant’s SLA benefits. Under ERISA § 205(d), joint and survivor annuities between 50% and 100% must be at least the actuarial equivalent of the participant’s SLA. The interest rate assumption accounts for the time value of money — the idea that a dollar in hand today is worth more than a dollar paid in a year, or in ten years — and discounts the value of expected future payments to the present. Like mortality, the interest rate affects the calculation.”

Plaintiff alleged, “To determine the amount of a benefit, mortality and interest rate assumptions, together, generate a ‘reduction factor,’ which is expressed as a percentage of the benefit being compared. The actuarial assumptions used to generate the reduction factor directly impact the monthly benefit amounts that participants and their spouses receive. If a plan’s reduction factor is greater than the one generated using reasonable mortality and interest rate assumptions, then the resulting joint and survivor annuity payments will be too low and will not be ‘actuarially equivalent’ to the SLA.”

Plaintiff further alleged, “The reduction factors that Defendants apply to calculate SBOs are excessive, reducing participants’ benefits below an actuarially equivalent amount. The Plan’s reduction factors are consistent with factors produced by the 1971 GAM mortality table, which used mortality date from the 1960s.”

Additionally, the plaintiff alleged that “Defendants reduce participants’ benefits by too much when they select an SBO, resulting in participants receiving monthly payments that are materially lower than they would be if Defendants used reduction factors based on up-to-date, reasonable actuarial assumptions. In sum, Defendants are causing Plaintiff and Class Members to receive lower pension benefits than they should each month, a harm that will affect them throughout their retirements.”

Plaintiff stated two claims for relief, including for alleged declaratory and equitable relief and breach of fiduciary duty.

In its prayer for relief, the plaintiff requested a judgment for declaratory relief. The plaintiff also requested an award for disgorgement of any profits received by the defendants together with attorneys’ fees and expenses incurred by the plaintiff.

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