Employee Retirement Income Security Act (ERISA); Benefits for married plan participants; “Qualified joint & survivor annuity” (QJSA) plans; 29 USC § 1055(a)(1); Whether use of outdated mortality tables violated ERISA’s “actuarial equivalence requirement” (§ 1055(d)(1)(B)); Single life annuity (SLA); Joint & survivor annuity (JSA)

[This appeal was from the ED-MI.] The court reversed the dismissal of plaintiffs-pension plan participants’ ERISA-violation claims against defendants-Kellogg and FedEx, holding that plaintiffs successfully stated claims that defendants’ use of outdated mortality data to calculate their QJSA benefits violated ERISA’s actuarial equivalence requirement. Plaintiffs are retired married participants in the defendants’ employee defined benefit pension plans. They alleged that the plans violated ERISA’s actuarial equivalence requirement by using outdated mortality data to calculate their QJSA benefits, resulting in improperly decreased benefits. The district courts in both cases dismissed the actions, ruling that ERISA did not require that specific mortality tables or actuarial assumptions be used to calculate benefits for married participants. On appeal, the court noted that “§ 1055(d) specifies that a QJSA must be the ‘actuarial equivalent of a single annuity for the life of the participant.’” Because ERISA does not define the term “actuarial equivalence,” Congress conferred on the Treasury Department “the authority to interpret certain provisions of ERISA, including § 1055.” Plaintiffs argued that the use of outdated data failed to result in “JSAs that are actuarially equivalent to the SLAs they would otherwise receive, thereby denying them the QJSAs to which they are entitled under § 1055.” Defendants argued that the actuarial equivalence requirement does not place any “restrictions on the actuarial assumptions that a pension plan may use when calculating QJSAs.” The court held that “[e]quivalence in present value can only be achieved if the mortality assumptions used to convert the payment under the SLA to the payment under the QJSA reasonably reflect the ‘life of the participant’ who would otherwise receive the SLA.” This would require an accurate estimation of the participant’s lifespan and “necessarily requires the use of mortality data reasonably reflecting the life expectancy of a retiree living in the present day.” Plaintiffs alleged defendants “used mortality data from the 1960s and 1970s to calculate their benefits” so the JSAs offered “to married participants have lower present values than the SLAs” they would otherwise receive, meaning the JSAs do not meet the actuarial equivalence requirement. Accepting plaintiffs’ allegations as true, the court held that they plausibly alleged they “were denied a QJSA within the meaning of § 1055(d)(1)” and thus, they “stated plausible claims for violation of § 1055 and breach of fiduciary duty under ERISA.” Remanded.