THE WHAT? Colgate-Palmolive has agreed to a US$332 million settlement to resolve a class-action lawsuit over alleged pension miscalculations affecting more than 1,100 employees.

THE DETAILS The settlement, filed in Manhattan federal court, will cover 1,177 employees, with approximately US$232.7 million distributed after legal fees. The case stems from Colgate’s 1989 conversion of its pension plan to a cash balance structure and subsequent lump-sum payments. Plaintiffs argued that errors in calculating benefits persisted even after a 2005 amendment intended to address discrepancies.

Litigation has been ongoing since 2007, with the most recent lawsuit filed in 2016. Colgate has denied wrongdoing but opted to settle to mitigate further legal costs and risks. Funds for the settlement were set aside in 2023 and 2025.

THE WHY?  The settlement highlights the long-term financial and legal risks associated with pension plan conversions, particularly for large multinationals with complex employee benefit structures. For Colgate, the resolution removes a multi-decade liability that has lingered over its financial reporting and labor relations.

Source: Reuters