Delta, Plaintiffs Agree to Stay Case, Consider Settlement

Delta Air Lines and plaintiffs Marsha DeVaney and Thomas Biermann agreed to stay court proceedings for 120 days as the parties explore a settlement in a legal case that accuses the airline of spousal pension underpayment.

The complaint, DuVaney v. Delta Air Lines Inc. et al, originally filed in December 2021, alleges that the airline violated the Employee Retirement Income Security Act by using outdated actuarial assumptions, which resulted in lower retirement benefits payments for married employees who chose joint-and-survivor annuities.

DuVaney received a 50% joint and survivor annuity, naming her husband as the beneficiary. She claimed that after Delta acquired Northwest Airlines in 2010, the merged airline used outdated or unreasonable actuarial conversion factors to calculate joint-and-survivor benefits. As a result, married retirees, including DuVaney, received lower lifetime payments, according to the complaint.

Joint-and-survivor annuities are intended to continue providing benefits to a surviving spouse after the retiree’s death. The lawsuit alleges that Delta used conversion factors that reduced the present value of these benefits below the level required by federal law. Specifically, the complaint states that outdated actuarial assumptions led to an estimated $12,605 reduction in the present value of DuVaney’s pension benefits.

ERISA requires that all optional forms of pension benefits, including joint-and-survivor annuities, be actuarially equivalent to a retiree’s standard single-life annuity.

While some reduction in monthly benefits is expected when spousal coverage is elected, the lawsuit contends that Delta’s calculations resulted in a greater reduction than ERISA permits.

The stay allows the parties until April 9 to participate in private mediation to explore a settlement.

The parties proposed to file a joint status report within 10 business days following their mediation to inform the court of the mediation outcome and to provide their recommendations for next steps.

If a settlement is reached, the status report would outline proposed next steps and deadlines for finalizing the settlement and obtaining court approval, if necessary. If no settlement is reached, the status report would propose revised case deadlines based on the court’s current scheduling order, adjusted to account for the duration of the stay, according to the most recent court filing.

The plaintiffs are represented by Kemp Jones LLP; Izard, Kindall & Raabe LLP; Motley Rice LLC; and Bailey & Glasser LLP. Delta Air Lines is represented by Morgan, Lewis & Bockius LLP; Trucker Huss APC and Fisher & Phillips LLP.