Retirees Sue Liberty Mutual for Retirement Health Coverage

The plaintiffs in a new ERISA lawsuit say Liberty Mutual is not meeting the terms of summary plan descriptions sent to certain employees after the company’s 2008 Safeco acquisition.

A proposed class of plaintiffs has filed a new Employee Retirement Income Security Act (ERISA) lawsuit against Liberty Mutual Insurance Co. and its retirement and health care plans.

The lawsuit, filed in the U.S. District Court for the District of Massachusetts, accuses Liberty Mutual of failing to provide to certain former employees “a valuable set” of allegedly promised medical benefits, including post-retirement health care coverage benefits under the Liberty Mutual Health Plan.

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Plaintiffs say the summary plan descriptions (SPDs) that regularly went to employees describing the health care plan, and additional statements by Liberty personnel, all promised these valuable post-retirement medical benefits “commensurate with their years of service,” or “consistent with their hire date.”

“The more tenure an employee had, the greater their benefits under the plan,” the complaint states. “Importantly, Liberty Mutual and the plan promised [plaintiff] and his colleagues that prior years of service with companies Liberty Mutual had acquired, like Safeco Insurance in the case of [plaintiff], would all be counted toward the ‘years of service’ component when calculating Liberty Mutual retirement benefits. The hire date used for calculating retirement benefits, in other words, would be the original hire date at the acquired company.”

The lawsuit states that the lead plaintiff and “hundreds of his colleagues” were part of Safeco when Liberty Mutual acquired that company in about 2008. According to the complaint, when the lead plaintiff retired in 2019, he had worked for 38 years for Safeco/Liberty Mutual.

“Thus, Liberty Mutual had originally promised, in short, to credit [him] with his 38-plus years of total service for purposes of calculating his retirement medical benefits,” the complaint states. “Liberty Mutual made the same promise to everyone who came over from Safeco in the acquisition. However, once it was time for [the plaintiff] and others to retire or apply for their promised benefits, Liberty Mutual reneged. Liberty now takes the position that the prior years of service with Safeco should never have been counted and that they will not be counted.”

The complaint suggests that Liberty Mutual has cut back in this way on promised benefits going to about 700 of its current and former employees. According to the complaint, the lead plaintiff appealed the decision directly to Liberty Mutual and its retirement/health plan committees, but was not successful. The suit states that the plaintiff has exhausted all his administrative remedies to no avail. 

“Liberty Mutual even refused to fairly respond to inquiries and requests for plan information even though it, as a fiduciary, had an obligation to comply,” the complaint states.

Much of the text of the complaint is dedicated to an explanation of what language is and is not allegedly contained in the SPDs at the center of the lawsuit. Additionally, the complaint states that defendants never provided anything in writing clearly indicating that the years of service at Safeco would be excluded for the purpose of calculating benefits.

“The SPDs expressly referred to former employees of Safeco as being ‘grandfathered’ into Liberty Mutual and its retirement plan/benefits,” the complaint states. “The SPDs continued to do so for about 10 years and never suggested that Safeco time would somehow be excluded from the calculation of retirement benefits until [the lead plaintiff in this case] first claimed benefits or objected to not receiving his credit for his Safeco years, and until after [this individual] had many calls with Liberty Mutual and sent correspondence to Liberty Mutual pointing out that the plan and the SPDs promised credit for the Safeco years. Only in 2019, after [plaintiff] reminded Liberty Mutual of its prior promises, did Liberty attempt to modify its SPDs to, now, purportedly exclude Safeco time from prior service credit.”

Liberty Mutual has not yet responded to a request for comment about the lawsuit.