In exchange for releases of all claims that were brought or could have been brought via this lawsuit, Defendants have agreed to pay a “Total Settlement Amount” of $332 million.  See Agreement § 2A.  If the Court approves the settlement, certain expenses connected to the lawsuit and settlement will be deducted from the Total Settlement Amount, leaving the Settlement Benefit Fund, which is the amount that will be available for distribution to the Class, i.e., the Plan participants, their spouses (as of the original payment date) or, to the extent applicable their beneficiaries, alternate payees, and/or estates, as listed on the Spreadsheet attached to the Settlement Agreement as Attachment A.  Id. § 1TT, § 2A, § 4 (in particular §§ 4B4 and 4C), § 14..

These expenses, each of which must be specifically approved by the Court, are: (1) a service award to Ms. McCutcheon for her role in this litigation; (2) certain settlement administration costs; and (3) Class Counsel’s attorneys’ fees and expenses. If the maximum amount requested by Plaintiff and Class Counsel for these expenses are approved by the Court, the Settlement Benefit Fund is estimated to be approximately $232.7 million.

No portion of the Settlement Benefit Fund is conditioned on applications by Class members:  100% of the Settlement Benefit Fund will be used to provide Class members with (1) immediate lump sum payments to make up for all missed prior RA payments and (2) future RA payments, provided the Class member (or the Class member’s spouse at the time of the original payment) is alive as of August 1, 2025.  Id. § 4B3.

Plaintiffs’ counsel will seek an award of attorneys’ fees of no more than 29% of the Total Settlement Amount in addition to reimbursement of litigation expenses that are estimated to not exceed $2.9 million (virtually all of which is for reimbursement of amounts paid to Plaintiff’s actuarial expert over the past 11 years).  See Agreement § 1Q.  In addition, Class Counsel will seek reimbursement of Settlement Administration Costs of an amount not to exceed $150,000, which is to cover the Notice Administrator’s costs and the cost of the ERISA Enrolled Actuary who will calculate all Class members’ individual settlement benefits according to the Agreement’s plan of allocation and including all other costs and expenses in connection with future work that will be necessary to oversee and monitor implementation of the settlement and distribution of its proceeds and notice to the Class.  Id. § 1GGG.

Plaintiff McCutcheon, who had to respond to Defendants’ discovery requests and undergo a deposition and who actively participated in the parties’ multiple mediations and settlement discussions as Class representative, will petition the Court for an award of additional compensation for services rendered to the Class at the same time that counsel files the fee petition.  See Agreement § 1U (not to exceed $10,000).

The Agreement calls for a determination of each Class member’s RA settlement benefit based on what Plaintiff contends are the results of the 20 step-by-step instructions (some with sub-steps) that the Court ordered in its April 26, 2024 amended final judgment for calculating the RA back payments due, and the monthly RA payments going forward.  See Colgate II, Dkt. 319 at 1-4; Agreement § 1A-I and § 4.  All calculations—of both the estimated settlement benefits for purposes of notice, and final benefits for purposes of distribution—were and/or will be completed by the ERISA Enrolled Actuary referenced above.  Id. § 4A.

Prior to arriving at each Class member’s final benefit, the Class member’s April 25, 2024 Judgment Benefit will be equal to the sum of (1) for each month the annuity was or should have been paid, the difference between the RA that should have been paid and the RA actually paid, if any, brought forward with interest at 5% (the same rate selected by Defendants in 2014 to apply to missed payments, and not disputed by Plaintiffs as an appropriate rate to use), and (2) the present value of expected future additional RA payments, based upon the assumptions prescribed in the Court’s April 2024 Amended Final Judgment.  Id. § 1A-I.  The final benefit will then be determined, via the Plan of Allocation, by applying a factor to the April 26, 2024 Judgment Benefit that represents a pro rata reduction to account for (1) the member’s share of the settlement discount and (2) all court-approved deductions (i.e., attorneys’ fees and expenses, settlement administration costs and the Class representative service award, if any).  Id. § 4B and C.  Under the Agreement, in no event will any Class member’s total net settlement benefit be less than $1,000 (which impacts 8 Class members).  Id. §§ 1NN, 4B3.

Each Class member’s net settlement benefit will be paid as (1) an immediate lump sum (to make up for missed RA payments prior to August 2025 plus any additional missed payments between August 2025 and the date monthly payments actually commence), and (2) future monthly RA payments, provided the Class member (or the Class member’s spouse at the time of the original payment) is alive on the date monthly payments actually commence.  Id. § 4B4.