MetLife agreed to a $23 million settlement to end a nearly eight-year legal dispute that accused the company of not giving employees the level of benefits to which they were entitled.
In Masten et al. v. Metropolitan Life Insurance Co. et al., filed in U.S. District Court for the Southern District of New York, plaintiffs questioned how MetLife’s pension plan calculated the value of joint and survivor annuity payments compared with single annuity payments under both the current and old versions of the plan, calculations the plaintiffs alleged violated the Employee Retirement Income Security Act.
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The plaintiffs claimed that MetLife was not paying retirees the full value they were owed when they chose certain benefit options, such as a joint and survivor annuity. The lawsuit claimed MetLife should have made sure all annuity options were “actuarially equivalent”—meaning they should be worth the same amount overall as the plan’s standard benefit—according to ERISA rules and the plan’s own documents. However, the complaint argued that MetLife used mortality tables from the 1970s and 1980s to make these calculations. As a result, retirees who chose the joint and survivor option may have received less money than they should.
An actuarial life table shows how likely people are to die at each age and how long they are expected to live. Insurance companies use these tables to estimate life expectancy and set premiums.
The complaint was filed in December 2018, and after several years of litigation—including a denied motion to dismiss, class certification and a failed mediation—the case was set for trial in February. On the eve of trial, the parties reached an agreement in principle to settle the claims.
MetLife declined to comment.
The MetLife Retirement Plan had 13,263 participants with more than $7.9 billion in assets as of 2024, according to its most recent Form 5500 filing.
