Court Revives Pension Claims Against Kellogg and FedEx over Outdated Data

Why It Matters

The decision could force thousands of legacy defined‑benefit plans to update actuarial assumptions, creating significant funding and compliance implications across the pension industry.

Key Takeaways

• Courts revived pension lawsuits against Kellogg, FedEx.
• Plans used mortality tables from 1960s‑70s.
• Outdated tables lower joint‑survivor annuity payments.
• Ruling may require updating actuarial assumptions.
• HR teams urged to review legacy plan data.

Pulse Analysis

The Sixth Circuit’s March 16 decision revives class‑action suits alleging that Kellogg’s and FedEx’s defined‑benefit plans relied on mortality tables dating back to the 1960s and early 1970s. Under ERISA, joint‑and‑survivor annuities must be actuarially equivalent to single‑life benefits, a standard the court interpreted as requiring assumptions that reflect current life expectancy. By using the 1984 Uninsured Pensioners table and the 1971 GAM table, the plans arguably underestimated retirees’ longevity, resulting in lower monthly payouts for married participants.

The ruling signals a shift in how courts may enforce the “reasonable actuarial assumptions” clause embedded in ERISA and the tax code. Companies with legacy pension documents could face sizable retroactive adjustments if their tables are deemed obsolete, exposing them to additional funding obligations and potential penalties. Pension consultants and actuaries are already warning that dozens of large employers maintain similar outdated assumptions, raising the prospect of a wave of litigation that could reshape funding strategies across the industry.

For HR and benefits teams, the immediate priority is a forensic review of every defined‑benefit plan’s actuarial inputs. Updating to modern mortality tables such as the 2012 CO‑202 or the 2020 RP‑2014 can align assumptions with contemporary longevity trends and mitigate legal risk. Transparent communication with retirees about any recalculations will also help preserve trust. As the cases head back to trial courts, the decision offers a clear benchmark for future ERISA disputes, encouraging proactive compliance before regulators or courts intervene.