Pensions Expert Witness’ Testimony on Benefits under ERISA’s Accrual Rules Admitted

Plaintiffs bring this suit under the Employee Retirement Income Security Act (ERISA).

ERISA’s central object is to “protect employees’ justified expectations of receiving the benefits their employers promise them.” This case centers on the Coastal Transition Benefit, a benefit formula that originated in the Coastal Plan and that, through a series of corporate transactions, now appears in the Plan. Plaintiffs alleged the Coastal Transition Benefit formula improperly accrued benefits over participants’ entire careers rather than over their first 30 years of service in violation of various provisions of ERISA.

As the Court knows, two of Plaintiffs’ claims—Claims I and VI—center on Plaintiffs’ contentions that the Coastal Transition Benefit formula is impermissibly backloaded and that the Plan’s actuarial factors used to reduce benefits for commencement before normal retirement date are unreasonable.

Defendants sought to exclude the testimony of Plaintiffs’ expert Michael L. Libman as unreliable under Federal Rule of Evidence 702. Plaintiffs offered Libman as an expert on benefits under ERISA’s accrual rules and “actuarial equivalent” reductions.

Pensions Expert Witness

Michael Libman has been a pension actuary for over forty years. In that time, he has testified as an expert on pension issues in many cases.

Want to know more about the challenges Michael Libman has faced? Get the full details with our Challenge Study report. 

Discussion by the Court

Libman’s expert reports supported Claims I and VI and his testimony is based upon a close read of statutory rules, Treasury Regulations, applicable legal precedent and authority, the Plan document, and relevant documentation provided by Defendants.

Based on his read of the Plan provisions, Libman’s report set forth actuarial calculations to assess whether the Plan complies with ERISA’s anti-backloading and actuarial equivalence provisions.

The Court held that while some of Libman’s interpretations of the Plan are perhaps open to question, there is no issue with the reliability of his testimony in general.

Held

The Court denied the Defendants’ motion to exclude the testimony of Michael Libman.

Key Takeaway:

After reviewing the parties’ filings and Libman’s testimony, the Court finds that Plaintiffs have shown, by a preponderance of the evidence, that Libman’s testimony is reliable. In so finding, the Court notes that the Daubert inquiry does not require district courts to assess whether an expert’s testimony is correct; courts need only determine whether the testimony is reliable.

Case Details:

Case Caption:	Pedersen Et Al V. Kinder Morgan, Inc. Et Al
Docket Number:	4:21cv3590
Court:	United States District Court for the Southern District of Texas, Houston Division
Order Date:	July 24, 2024