A class-action lawsuit has been filed in U.S. District Court for Northern California over pensions for retired DuPont Co. workers.
The suit follows the DowDuPont merger and later spin-off into three companies, Corteva, DuPont and Dow.
The suit names the three companies and their officials.Spokespeople for Corteva and DuPont did not immediately respond to a request for comment on the suit.
Under the spinoff, Corteva will handle DuPont pensions. Corteva is a combination of DuPont and Dow agricultural businesses.
In announcing the transfer of pension management to Corteva, DuPont CEO Edward Breen said retirees should feel confident about Corteva and its business prospects, as a “pure play” company with growth potential.
There has been some skepticism among retirees with the choice of Corteva.
DuPont is a collection of businesses that include food ingredients, building products like Tyvek, solar materials, and Kevlar, a lightweight material that is widely used for protection in law enforcement and the armed services, as well as in aircraft components.Been says some of DuPont’snoncore businesses will be sold.
Retirees have expressed reservations about the finances of Corteva and its presence in agriscience an area where earnings can be subject to weather, global trade and other issues.
The suit claims that the Corteva-led pension plan is underfunded and uses overly optimistic estimates. DuPont added funding to the pension plan prior to the spinoff.
“Using artificially high interest rates to calculate statutory segment rates decreases the funding shortfall that a plan is required to disclose to participants annually. At the same time, these inflated interest rates decrease the minimum amount a plan sponsor is required to contribute each year.,” the suit claims.
“Understated liabilities and reduced contributions are a double whammy. Not only are the Plan’s liabilities understated, but, because liabilities are directly linked with funding requirements, less cash is being invested to cover future benefits. Should Corteva suffer any downturns in its business, retirees are at risk,” plaintiffs claim.
DuPont has thousands of retirees in Delaware and adjacent areas