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ConAgra Brands Shrunken Retirement Plan Benefits ERISA Class Action

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Over the years, as companies sell out and merge and change identities, their internal plans can suffer changes. Plaintiff Vicki Michael worked in the same processing plant from 1974 to 2016, and she wants the retirement benefits she was promised when she began working there. But the complaint for this class action claims that company changes are unfairly depriving her of those benefits, in violation of the Employee Retirement Income Security Act (ERISA).

The class for this action is all participants of the ConAgra Brands, Inc. Pension Plan for Hourly Rate Production who worked for Amfac Foods, Inc. for some time prior to June 8, 1988 and have retired or terminated with more than 35 years of service, and have had all retirement income under the Amfac plan subtracted in the benefits formula under the ConAgra Plan even though that retirement income was partially earned on service not credited in the benefits formula under the ConAgra plan.

Michael began working in 1974 at Amfac Foods, Inc., and was covered by its Pension Plan for Hourly Bargaining Unit Employees. She earned “benefit service” under this plan up until June 6, 1988, when the company sold its outstanding common stock and the plan was terminated.

The successor plan was the Pension Plan for Hourly Bargaining Unit Employees of Lamb-Weston, Inc. as of June 6, 1988. Employees like Michael were given vesting service credit for their work before that date to the extent it had been given them under the earlier plan.

As of December 31, 2014, that plan was merged into the ConAgra Plan, called in this case the “Bargaining Unit Plan.”

But the complaint points out two contradictory statements in the plan summary for the Bargaining Unit Plan.

First, the complaint quotes it as saying, on page 6, that an employee’s benefit service under the Prior Amfac Plan “is benefit service under” the Bargaining Unit Plan.

Second, the complaint quotes it as saying, on page 7, that benefit service taken into account in the Benefit Formula (to figure retirement benefits) is capped at 35 years. Benefit service years before that are disregarded.

The Bargaining Unit Plan says that for participants in the Prior Amfac Plan, the benefit determined by a rate table “will be offset by the monthly benefit amount payable from the [Prior Amfac Plan] on account of benefit service credited under” the Bargaining Unit Plan. A sample calculation shows benefits due to someone who worked for 38 years but it does not “show any credit for the years 1974-1978 in the application of the Benefits Formula; just for years 1979-2011.”

The complaint says, “Nowhere does the Plan Summary … specify and imply that there is to be subtracted in the Benefits Formula the retirement income accrued under the Prior Amfac Plan from the Disregarded Service Period.”

The complaint contends that the company and plan are violating their fiduciary duties to plan participants under ERISA.

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