The class action suit covers some 25,000 former Xerox workers who, after January 1, 1990, chose to receive pension benefits in a single payment rather than monthly checks. The retirees claim their pensions were sharply discounted because they retired before age 65.
Last year Judge David R. Herndon of the US District Court for the Southern District of Illinois ruled that Xerox incorrectly calculated lump-sum retirement payments to departing employees, resulting in lower payments to the retirees than they were due under the Employee Retirement Income Security Act (ERISA) (see Xerox: What Not To Copy ).
In his final judgment handed down September 30, Herndon adopted the retiree’s method for calculating damages, which amounted to $284 million. In December of 2001, the plaintiffs had submitted papers claiming $284 million in damages. The beleagured copier company disclosed the ruling in a Securities and Exchange Commission filing, but said it plans to appeal the ruling.
As previously disclosed, any final judgment after appeal would be paid from the Retirement Income Guarantee Plan’s assets. However, that payment might require Xerox to make additional contributions to the plan in the future based on a potential shortfall in the plan assets available to pay other plan liabilities, according to the filing.
However, Xerox’s Retirement Income Guarantee Plan said it denies any wrongdoing and believes it has strong arguments on appeal.