Read the court ruling here.
The retirees won the ruling in Wisconsin Eastern District Federal Court. The case was filed by Michael J. Thompson and others against the retirement plans for SC Johnson and JohnsonDiversey.
The retirees had asked for two rulings against the companies. They first claimed the retirement plans "backloaded" benefits, which the court dismissed. The second was that SCJ and JohnsonDiversey miscalculated how much it paid out in "lump-sum payments" to the retirees. The federal court agreed with the retirees and ordered the companies to refigure the payments. From the ruling:
The court finds that the unlawful conduct here is the Plans' calculation and payment of lump sum benefits in an amount less than the present value of the participants' accrued benefits at age 65, which generated an alleged forfeiture of benefits to the plaintiffs. A forfeiture of benefits pursuant to an improper calculation cannot occur until the "lump sum" amount is determined and dispersed to the participant.The two sides have a July 11 deadline to reply to the court. After these filings the court will enter a final order on damages.
May social justice prevail!
ReplyDelete12:23 - You have used too many words. May justice prevail!
ReplyDeleteDoubt if either of you can explain what the decision said (or didn't say)
ReplyDeleteSee - the Johnson's don't just screw the city - they even screw their own!!
ReplyDeleteThis is messed up. I do think they have an outside firm that runs the pensions, but still!
ReplyDeleteThe issue is simply that they used an incorrect formula when they tried to calculate the Cash Payment. all their prior pension was a monthly annuity and when they added the cash payment, they calculated the present value of the annunities incorrectly.
ReplyDeleteYou can make as big a deal of it as you want, but it was a math calulation. There is no "let's screw them" memo.
PS: I am a Johnson Retiree so I'm inpacted. and I'd rahter be screwed by SCJ than treated "fairly" by some of our other employers.
I am the 1:05 poster. Just so there's no confusion for the posters in front of me and behind me, courts are not there to enforce social justice. They are there to interpret and enforce the law. That's when justice prevails. Some times the little guy gets screwed because it's the law. It happens to the big guy too. Unfortunately, too often courts try to impose some sort of touchy feely standard where none exists in the law.
ReplyDeleteBy the way - the only "recalculation of benefits" has to do with Cash Payment". Anyone who selected the Annuity Option is whole. Frankly, unless you are independantly wealthy, the average retiree is better off with the annuity than with the cash payment.
ReplyDeleteCurrent employees and those drawing annuities are not whole as their notional value in the accounts must be adjusted which will recalculate the amount of annuty payments received.
ReplyDeleteMonetary inflation, future price inflation and interest concerns leave former employees or retirees in a position to draw a great degree of value from lump sums by being paid now instead of later.
Those choosing a lump sum option can pay the remainder of their mortgage or other outstanding debt to negate interest costs. They can invest on their own online, through a broker, or their bank.
The averaging of various years' return by the Plans seeks to reduce the amount SCJ and JDI should pay out. It appears the Plans weren't seeking an equitable settlement. It remains to be seen what calculation they come to in the coming days to present before the court.
On its face, the judge is giving the Plans the chance to correct the miscalculation they've made but it remains to be seen if the ones who did the bad math in the first place will suddenly be possessed of good math.
Correcting my previous. Current employees and retirees are whole as they don't require a whipsaw calculation.
ReplyDeleteAlways amazes me when I see a post like the one at 3/29/10 4:55. SC Johnson and it's sister companies are routinely listed on the various lists of best places to work. Moreover, the Johnson family, and the companies they own, have done more for Racine over the years than any other company or family.
ReplyDeleteWithout the Johnsons and their companies, Racine would be a much, much less desirable place to live.
Does anyone know the status on this suit? Did the parties go back to court this month? I am a lump sum retiree and expect that I am included in the suit. I live out of town and have heard nothing from anyone involved witht the suit.
ReplyDelete