As alleged in this action, Participants of the Olympus Corporation of the Americas Pension Plan bring this action under 29 U.S.C. §1132(a)(2) and (3) on behalf of the Plan against Defendants Olympus Corporation of the Americas (“Olympus”), the Benefits Administrative Committee of Olympus (the “Committee”), and John Does 1-10 (collectively, “Defendants”), for breach of fiduciary duties under the Employee Retirement Income Security Act, 29 U.S.C. §§1001–1461 (“ERISA”).
Plaintiffs were among the group of vested terminated participants eligible to participate in the 2020 lump sum window who in fact elected to take the lump sum buyout. As with all such windows, the special opportunity would be available only if the participant elected to receive the lump sum distribution in time for the distribution to be made prior to March 31, 2020.
Olympus offered this lump sum windows in order to reduce its pension funding obligations—if Olympus were able to cash out the benefits of vested terminated participants prior to April 1, 2020, it would save millions of dollars in pension funding expenses due to the actuarial assumptions and methods used to calculate the lump sum value of each participant’s pension benefit.
Hundreds of Deferred Vested Participants accepted the lump sum offer and received payment of the amounts specified in the Lump Sum Offer Letter, only to months later receive a Notice of Benefit Overpayment which informed Participants that they had received an overpayment from the Plan because their distribution was based on an incorrect interest rate and it described the amount of the difference in value.
The Notice purported to give participants the choice either to: (i) revoke their previous election to receive a lump sum distribution and retain the right to receive their benefit in the form of an annuity beginning at normal or early retirement age; or (ii) confirm the election of a lump sum distribution by either returning the form included for that purpose or by doing nothing at all. In other words, the default election was to receive a lump sum distribution.
The Notice further informed participants that Olympus, through Milliman, would pursue self-help remedies in order to recoup the alleged overpayments, including issuing stop payment orders with respect to distribution checks that had not been negotiated, and seeking to recover distributions from the financial institutions into which Participants had rolled over their lump sum distributions in a tax-free rollover or directly from participants.
The Notices of Overpayment informed Plan Participants that in many cases the Company was demanding as much as 45% or more of the disbursed funds to be returned.
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