Putative Class Action Against Defined-Benefit Pension Plan Dismissed For Lack Of Standing

On July 2, 2024, Justice Andrea Masley dismissed claims brought by putative class action plaintiffs against New York City’s employee pension system because the plaintiffs could not show they suffered an injury from any alleged mismanagement of the system’s investments. In Wayne Wong, et al. v. New York City Employees’ Retirement System, et al., Index No. 652297/2023, the plaintiffs asserted claims under the Federal Employee Retirement Income Security Act (“ERISA”) based on allegedly poor management of investments in their pension plans. The Court concluded, however, that the plaintiffs could not show an actual injury sufficient to support their standing to sue because their fixed pension payments would remain the same regardless of any alleged mismanagement. The Court explained:

Here, the pension plans at issue are also “defined benefit” retirement plans. . . . Thus, plaintiffs are entitled to a fixed benefit each month and will receive the same amount regardless of whether they win or lose this action. Just like the plaintiffs in Thole, plaintiffs here have not, and will not, suffer any monetary losses based upon defendants' investment decisions. . . . Plaintiffs assert that they have a stake in the outcome of this litigation because defendants’ investment decisions have had “a detrimental impact on the financial health” of their retirement plans and on their plans’ “ability to pay the pension benefits they owe.” . . . However, plaintiffs’ allegations regarding their plans’ potential inability to meet their payment obligations are speculative and they also concede that any “underfunding ultimately puts New York City taxpayers on the hook.”

The attorneys at Schlam Stone & Dolan frequently litigate cases involving class action claims. Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning such issues.