Xerox Opts for Cash Balance Settlement

November 14, 2003 ( - The Xerox Corporation Retirement Income Guarantee Plan (RIGP) has reached an agreement in principle to settle pension-related litigation.

Per terms of the settlement, RIGP will pay $239 to settle the case.    The settlement is subject to court approval before it becomes final, according to a Xerox news release. 

The class action suit – Berger v. RIGP – 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 (See  Federal Judge Backs Xerox Retiree Claim ). 

News of the settlement follows the Seventh Circuit Court of Appeals’ ruling in August that the world’s largest maker of copiers to pay about $300 million to settle a dispute over how the company calculated retirement benefits for former employees (See  Xerox Cash Balance Calc Appeal Rejected ).  This after the US District Court for the Southern District of Illinois handed down a ruling last September that Xerox adopt the retiree’s method for calculating damages, which amounted to $284 million (See Xerox: What Not To Copy ).  While Xerox had at one time said it might appeal the Seventh Circuit’s decision, the settlement proposal would make that a moot issue.

In April, Xerox reported a first-quarter pre-tax charge of $183 million to cover any potential pension-funding shortfall should RIGP be required to pay damages in this case (See  Xerox Records Pension Suit Litigation Charge ).

RIGP is the primary pension plan for Xerox’s salaried employees in theUnited States.   Former Xerox employees who are eligible to receive damages will receive notification when the settlement is approved, according to the Xerox news release.