Washington Mutual Inc. (Pension Plan)

 

The Fairness Hearing in this matter was held on October 29, 2010. At the hearing, the Court entered Final Approval of the Settlement, approved the Plan of Allocation and granted Plaintiffs’ Motion for Attorneys Fees, Expenses and Case Contribution Awards.

On December 15, 2010, the final list of members of the Settlement Class was filed with the Court. The Internal Revenue Service made a final approval of the settlement on December 17, 2010 and the settlement funds were distributed to class member Washington Mutual Cash Balance Pension Plan accounts in April, 2011, as described in more detail below.

Case History

This case involves allegations that the WaMu Pension Plan’s cash balance design and the Great Western Retirement Plan’s cash balance design violated the law governing pensions and that the notices that Washington Mutual and Great Western provided to employees regarding the cash balance formulas did not adequately disclose that the amendments would cause significant reductions to the rate of future benefit accrual. The WaMu Pension Plan ERISA Complaint was filed in the United States District Court for the Western District of Washington on June 12, 2007 on behalf of Plaintiffs and the class.

On December 12, 2007, the Court ruled on Defendants’ Motion to Dismiss the Complaint by dismissing certain of the Complaint allegations, and upholding the allegation that the Defendants failed to provide adequate notice to participants of the reduction to the future rate of benefit accrual caused by a merger or conversion of certain pension plans’ final average pay formulas to cash balance formulas.

On April 16, 2008, Plaintiffs filed a Second Amended Complaint, and on July 24, 2008, Judge Pechman certified four subclasses. On August 7, 2008, Plaintiffs filed a motion to amend the class to include two additional subclasses.

On September 16, 2008, after the completion of fact and expert discovery, the parties filed cross-motions for summary judgment.

On September 26, 2008, Washington Mutual Inc. filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code with the United States Bankruptcy Court for the District of Delaware. As a result of the Chapter 11 Case, this Court stayed the Buus Action on October 2, 2008.

The Settlement

The Parties to the litigation executed a Settlement Agreement on June 29, 2010. The Court entered Final Approval of the Settlement Agreement at the Fairness Hearing on October 29, 2010. The Settlement provided for a payment of $20 million, net of expenses and attorney fees, to the Plan for the benefit of the following Settlement subclasses:

(1) all participants, whether active, inactive or retired, who were participants in and entitled to accrue benefits under the WaMu Pension Plan immediately prior to January 1, 1987, and whose accrued benefits or pension benefits are based in whole or in part on the WaMu Pension Plan’s cash balance formula, from January 1, 1987 to the present,

(2) all participants, whether active, inactive or retired, their beneficiaries and estates, who were participants in and entitled to accrue benefits under the Great Western Retirement Plan immediately prior to January 1, 1997, and whose accrued benefits or pension benefits are based in whole or in part on the cash balance formulas of the Great Western Retirement Plan and/or the WaMu Pension Plan, from January 1, 1997 to the present,

(3) all participants, whether active, inactive or retired, their beneficiaries or estates, who were participants in and entitled to accrue benefits under the Dime Bancorp, Inc. Retirement Plan immediately prior to April 1, 2002, and whose accrued benefits or pensions benefits are based in whole or in part on the WaMu Pension Plan’s cash balance formula from April 1, 2002 to the present,

(4) all participants, whether active, inactive or retired, their beneficiaries and estates, who were participants in and entitled to accrue benefits under the Pacific First Bank Retirement Plan immediately prior to April 1, 1994, and whose accrued benefits are based in whole or in part on the WaMu Pension Plan’s cash balance formula, from April 1, 1994 to the present,

(5) all participants, whether active, inactive or retired, their beneficiaries and estates, who were participants in and entitled to accrue benefits under the H.F. Ahmanson & Company Retirement Plan immediately prior to July 1, 1999, and whose accrued benefits or pension benefits are based in part on the WaMu Pension Plan’s cash balance formula, from July 1, 1999 to the present, and

(6) all participants, whether active, inactive or retired, their beneficiaries and estates, who were participants in and entitled to accrue benefits under the Great Western Retirement Plan on the WaMu Pension Plan’s cash balance formula, from January 1, 1998 to the present, but only with respect to such participants not described in section (ii) above;

The distribution of the settlement proceeds to the class pursuant to the Court-approved Plan of Allocation was completed in April, 2011 and the matter has been concluded.

 

Case Documents

Amended Complaint – 04/16/08

Settlement Agreement – 06/29/10

Order re- Final Approval – 10/29/10

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