UCB Pension Reduction Litigation Settlement
Ahrens, et al. v. UCB Holdings, Inc., et al., No. 1:15-cv-00348 (N.D. Ga.)
Key Case Documents
Summary of the Settlement
A $5.5 million settlement has been reached in a class action lawsuit against UCB, Inc. on behalf of a class of current and former UCB employees who previously worked at Northampton or Whitby before those companies were acquired by UCB. The lawsuit claims that UCB did not comply with the Employee Retirement Income Security Act of 1974 ("ERISA") by failing to credit those employee-participants of the UCB, Inc. Defined Benefit Pension Plan (the "Plan" or the "UCB Plan") for the years they worked at Northampton or Whitby before those companies were acquired by UCB. The UCB Plan provides benefits based on a participant's salary and number of years an employee worked, therefore, including more years in the calculation of pension benefits would yield greater benefits for a participant. Defendants have denied these claims and maintain that Plaintiffs and members of the Class are not entitled to relief. The parties have agreed to a settlement.
Who is Included?
You are included as part of the Settlement Class if you do not fall under any of the categories of excluded persons below and are (1) a participant in the UCB Plan and are a current or former employee of UCB, Inc. or UCB Holdings, Inc. who worked at Northampton Medical, Inc. or Whitby, Inc. or Whitby Pharmaceuticals, Inc. before UCB acquired those companies and, after the acquisition, was a participant in the UCB Plan, or (2) are a beneficiary of such a person.
The following persons are excluded from the Settlement Class: (a) the Administrative Committee Defendants (as that term is defined in the Complaint); (b) any fiduciaries of the UCB 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 Plan; (e) any member of the immediate family of any heirs, successors, or 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 surviving spouse, alternate payee or designated beneficiary.
What does the Settlement Provide?
Defendants have agreed to pay a total of $5.5 million to settle this lawsuit. Once certain amounts are deducted, such as attorneys' fees and costs, the remaining amount (i.e., the Net Settlement Amount) will be allocated to Class Members based on a court-approved Plan of Allocation. The Plan of Allocation proposes that Class Members' benefits will be adjusted under the Plan and that settlement benefits will be paid through the UCB Plan. Defendants have also agreed to adopt and implement an amendment to the UCB Plan that will adjust benefits for Class Members consistent with the Plan of Allocation.
Plan of Allocation
The Plan of Allocation proposes to distribute the Net Settlement Amount among the participant Class Members based on their Recognized Claim. A Class Member's Recognized Claim depends on which Group the individual is classified below. An individual Class Member's percentage share of the Net Settlement Amount is equal to that Class Member's Recognized Claim divided by the total value of Recognized Claims.
The Class Member Groups are as follows:
Group 1: Participant Class Members of Group 1 are those who received a letter in 2011 or 2012 notifying them that their pension benefits under the UCB Plan would not include pre-acquisition service credit for years worked at Northampton or Whitby. These Class Members either were (1) in payment status by annuity for which the monthly annuity was reduced or lump sum for which some amount of prior payment was returned to UCB or the Plan, or (2) are individuals with deferred vested pensions and the amount of expected payment was reduced from what had previously been communicated to them. The Recognized Claim for Class Members of Group 1 will be based on 100% of the years they worked at Northampton or Whitby.
Group 2: Participant Class Members of Group 2 are those who received a letter in 2011 or 2012 notifying them that their pension benefits under the UCB Plan would not include pre-acquisition service credit for years worked in Northampton or Whitby. These Class Members had previously received payment from the UCB Plan reflecting credit for service with Northampton or Whitby but neither prior payment was returned to the Plan nor was expected payment reduced. The Recognized Claim for Class members of Group 2 will be zero as they have already received pension benefit payments reflecting pre-acquisition service. Although Class Members in Group 2 will not receive additional monetary distribution from the Settlement, the UCB Plan will be amended to recognize the prior amounts of benefits these persons already received and retained. This is intended to provide tax protections and prevent UCB from recouping any pension benefit payments to these persons that reflect years of service at Northampton or Whitby.
Group 3: Participant Class Members of Group 3 are those not included in Groups 1 or 2 who did not receive the letter in 2011 or 2012 that were sent to the other two Groups and whose pension benefits under the Plan did not include pre-acquisition service credit for years at Northampton or Whitby. The Recognized Claim for Class Members of Group 3 will be based on a minimum of 50% of the years spent at Northampton or Whitby, plus an additional 3% for each full year of post-acquisition service completed with UCB after the first year post-acquisition and before January 1, 2006, with a maximum of 75% of their work with Northampton or Whitby credited.
Appendix A of the Plan of Allocation (on this website) lists each individual percentage of the Net Settlement Amount and the claimant Group by participant ID. Each Class Member has a unique participant ID number that can be used with Appendix A to determine that individual's percentage of the Net Settlement Amount and whether they are categorized as Group 1, 2, or 3. Class Members should receive their individual participant ID number enclosed with a copy of the Class Notice.
Your Rights and Options
If you do nothing and you are eligible to participate in the Settlement, you may receive a pro rata distribution of the Settlement Fund based on your Recognized Claim. The parties intend to have the Settlement paid to Class Members through the Plan in order to allow Class Members to be able to potentially utilize certain tax favorable treatment of the payments under the UCB Plan, which is meant to be a tax qualified plan under the Internal Revenue Code. You should, however, consult with your tax advisor about the tax implications of any benefits that you receive as part of the Settlement. If you wish to object to the Settlement, the Plan of Allocation and/or the attorneys' fee award, you have until April 12, 2017 to file any objections to the Court. Any objections must include the following: (a) your full name, address, and an appearance on behalf of any counsel representing you, if any; (b) a written statement of the grounds for your objection including any supporting evidence; (c) any supporting memorandum or brief; (d) a list of any individuals who will be called to testify in support of your objection and the subject matter(s) on which such persons will testify; and (e) a statement whether you or your counsel intend to appear at the Final Approval Appearing, and if you will appear through counsel, the identify of your counsel.
The Court's Fairness Hearing
United States District Judge Thrash of the Northern District of Georgia will hold a hearing in this case (Ahrens, et al. v. UCB Holdings, Inc., et al., No. 15-cv-00348-TWT (N.D. Ga.)) at 11:00 a.m. on May 19, 2017 at 2188 Richard B. Russell Federal Building and United States Courthouse, 75 Ted Turner Drive, SW, Atlanta, GA 30303. At this hearing, the Court will consider whether the Settlement is fair, reasonable, and adequate, and will consider Class Counsel's request for attorneys' fees and costs. Although your attendance is not required, you or your lawyer may appear at the hearing at your own expense. If you wish to speak at the Final Approval Hearing, you may ask the Court for permission as long as you are a member of the Class.
Plaintiffs' filed a Motion to Certify Class and an Unopposed Motion for Preliminary Approval of Settlement on January 17, 2017. The Court issued an order certifying the class and granting preliminary approval on February 9, 2017. The Court held a Fairness Hearing on the Settlement on May 19, 2017 and after the hearing entered an Order granting final approval of the Settlement on May 19, 2017. There were no objections to the settlement; however, the settlement does not become non-appealable, and therefore, fully final until the time for appeal (30 days) expires or all appeals are resolved. Assuming no appeal is filed, the settlement will be final and non-appealable 30 days from the date that judgment is entered. For class members in payment status, payments will be made under the settlement 60 days after the settlement is final and non-appealable. Therefore, payments will be issued approximately 90 days from the May 19th Order granting final approval.
For More Information
This only constitutes a summary of the Settlement and the claims in the litigation. Also posted on this website is the full Class Notice, the Complaint, the Settlement Agreement, the Plan of Allocation, Plaintiffs' Motion for Preliminary Approval, and the Order on Preliminary Approval. Additional information, including Class Counsel's motion for attorneys' fees, will be posted when available. Additional information is also available on Class Counsel's website.
Key Case Documents
- Memorandum in Support of Plaintiffs' Unopposed Motion for Preliminary Approval
- Preliminary Approval Order
- Settlement Agreement
- Plan of Allocation
- Supplemental Notice Regarding Effect of Contemplated Plan Termination on Proposed Class Action Settlement
- Memorandum in Support of Class Counsel's Motion for an Award of Attorneys' Fees and Reimbursement of Expenses
- Memorandum in Support of Plaintiffs' Unopposed Motion for Final Approval of Class Action Settlement (May 4, 2017)
- Order Granting Plaintiffs' Motion for Final Approval of Settlement (May 19, 2017)