UCB, Inc. Pension Reduction Litigation
Court Grants Motions for Preliminary Approval of Settlement and Class Certification
Summary of the Lawsuit
This lawsuit alleges that the UCB, Inc. Defined Benefit Pension Plan (“the Plan”) improperly excluded the years that some employees worked at companies acquired by UCB for purposes of calculating pension benefits under the pre-2005 terms of the Plan.
Summary of the Claims
The lawsuit alleges that the pre-2005 terms of the UCB Inc. Defined Benefit Pension Plan required UCB to include in certain employees’ pension benefits the years that those employees worked for a company UCB acquired before 2005. In March 2005, the UCB Pension Plan was amended to change the terms so that such pre-UCB service would no longer be included. The lawsuit alleges that both ERISA and the terms of the Plan prohibited any such amendment from being applied retroactively to reduce accrued benefits, including those of Plaintiffs and the Class. Between 2005 and 2011, UCB issued statements to certain employee-participants that confirmed that their pre-acquisition service would be or was included.
In late 2011 and early 2012, UCB issued letters to certain participants in the UCB Pension Plan, including Plaintiffs, informing them that previously issued 2005 Pension Statements and other subsequent statements had been improperly calculated. The Complaint alleges that this was an attempt to improperly apply the 2005 amendment retroactively and that UCB was motivated to make this decision because of declining levels of funding for the Plan. From those participants who had already received payments that were based on the inclusion of pre-acquisition years of service, UCB sought to recoup the purported overpayments and demanded that Plaintiffs and other participants repay the alleged overpayments, plus interest at a rate of up to 8.25% per year.
The Complaint alleges Defendants UCB Holdings, Inc., UCB, Inc., and the Administrative Committee of the UCB Defined Benefit Pension Plan breached their fiduciary duties with respect to disclosures about the terms of the Plan and that the UCB Pension Plan should be reformed to be consistent with the terms as disclosed. The Complaint seeks to re-calculate Class members’ benefits under the Plan by including the years they spent working at an acquired company prior to its acquisition by UCB in the calculation of their benefits and to receive these benefits in the form of a single-life annuity, a lump sum, or any other distribution option offered by the Plan and elected by the Class member. Additionally, the Complaint requests that UCB disgorge any profits earned on benefits wrongfully withheld from or belatedly distributed to members of the Class and that UCB be enjoined from collecting any purported overpayments of benefits that it is not entitled to obtain.
Class Action Allegations
This lawsuit is brought on behalf of the following Class:
(1) All participants in the UCB Pension Plan who were employees of a subsidiary or affiliate of UCB, Inc. or a successor thereto (including UCB Holdings, Inc.) who had service with Northampton Medical, Inc. or Whitby, Inc. or Whitby Pharmaceuticals, Inc. before UCB acquired those companies and, after such acquisition, was a participant in the UCB Plan.
(2) Beneficiaries of each such participant.
Excluded from the Class are (a) the Administrative Committee Defendants, (b) any fiduciaries of the Plan, (c) any officers or directors of UCB, (d) any other persons who had decision-making or administrative authority relating to the establishment, administration, modification, funding, or interpretation of the UCB Pension Plan, (e) any member of the immediate family of or any heirs, successors, assigns of any such Excluded Person, and (f) any Plan participant who died prior to commencement of benefits from the UCB Plan without a qualifying spouse, alternate payee or designated beneficiary.
Status of the Litigation
The Complaint was filed on February 3, 2015. On January 6, 2016, the Court granted Defendants’ Motion to Dismiss Counts IV through VIII of the complaint. Parties engaged in mediation on July 26, 2016 and reached agreement as to the essential terms of the settlement at that time. A final settlement agreement was executed and filed with the Court on January 17, 2017.
More information is available at the Settlement Website.
Whom to Contact for More Information
If you are a member of the proposed class or you have information which might assist us in the prosecution of these allegations, please contact one of the following persons: