The Colgate pension class action settlement is a $332 million ERISA deal that pays about 1,177 Colgate-Palmolive retirees who were shortchanged on their pension benefits after the company’s 1989 plan conversion. Judge Lorna G. Schofield of the U.S. District Court for the Southern District of New York granted final approval on January 14, 2026, and Colgate must send lump-sum back payments and start monthly annuity payments no later than June 18, 2026.1Justia. McCutcheon v. Colgate-Palmolive Co., Final Order and Judgment
Who Is Covered by the Settlement
The class was certified in July 2017 and includes anyone who was a Colgate employee in July 1989, received a lump-sum payment from the retirement plan, and was entitled to a greater benefit under Plan Appendices B, C, or D than their accrued benefit. About 1,177 people meet that definition.2Colgate Pension Class Action. History of the Case
If a class member has died, their estate or heirs step into their place and receive the payment on their behalf.3Colgate Pension Class Action. Settlement Terms
What Class Members Receive
The total settlement is $332 million. After court-approved deductions for attorneys’ fees, litigation expenses, administration costs, and a service award, roughly $232.7 million goes to the class. That figure reflects nearly 100 percent of the residual annuities the retirees claimed, calculated exactly the way the plaintiffs argued they should be, with interest added.3Colgate Pension Class Action. Settlement Terms4Colgate Pension Class Action. McCutcheon v. Colgate-Palmolive Co.
Each eligible class member receives two things:
- A one-time lump-sum back payment covering all missed residual annuity payments, plus 5% interest.
- Ongoing monthly residual annuity payments going forward, paid to living class members and qualifying spouses.
No individual class member will receive less than $1,000 in total net settlement benefit.3Colgate Pension Class Action. Settlement Terms
Payment Deadline and How to Claim
Colgate must issue all lump-sum payments and begin monthly annuity payments by June 18, 2026. If the company misses that deadline, it owes an additional 5% interest on any amount still outstanding.3Colgate Pension Class Action. Settlement Terms
Living class members do not need to file anything. There is no claim form. One hundred percent of the benefit fund is distributed automatically based on plan records.3Colgate Pension Class Action. Settlement Terms
Heirs of deceased class members do have paperwork to file. To receive the payment owed to a deceased relative, an heir must submit a Successor Information Form to the settlement administrator.3Colgate Pension Class Action. Settlement Terms
Why Colgate Is Paying
The money resolves a dispute over how Colgate calculated benefits after it converted its pension plan in July 1989. Before that date, Colgate ran a traditional defined-benefit plan that paid only monthly annuities based on final average pay, years of service, and Social Security offsets. The conversion created a “Personal Retirement Account” for each participant and, for the first time, allowed lump-sum payouts.5FindLaw. McCutcheon v. Colgate-Palmolive Co.
Long-tenured employees were promised a “winning annuity” guarantee under Plan Appendix C: at retirement they would receive the larger of their original grandfathered annuity or their new PRA annuity. But the lump-sum option was tied only to the PRA value, so a retiree whose grandfathered benefit was larger effectively lost the extra amount when they took the lump sum.5FindLaw. McCutcheon v. Colgate-Palmolive Co.
In 2005, Colgate adopted the Residual Annuity Amendment (RAA), retroactive to 1989, to close that gap by paying a supplemental annuity to affected retirees. When Colgate began implementing the RAA in 2014, it compared the lump sum only against the grandfathered annuity, not against the larger “winning” annuity that Appendix C guaranteed. Across the class, that methodology understated benefits by tens of millions of dollars.6Justia. McCutcheon v. Colgate-Palmolive Co.2Colgate Pension Class Action. History of the Case
A second problem involved a pre-retirement mortality discount that Colgate applied when converting cash balances into annuities. Because the underlying benefit does not decrease if the participant dies before age 65, discounting for that possibility produced lump sums smaller than the true actuarial equivalent of the annuity being given up. Both federal courts that reviewed the case found this amounted to an illegal forfeiture under ERISA.6Justia. McCutcheon v. Colgate-Palmolive Co.
Colgate denied wrongdoing and said it settled to avoid the cost and risk of further litigation. The company had set aside reserves during the first quarters of 2023 and 2025 in anticipation of a potential resolution.7Benefits and Pensions Monitor. Decades-Old Pension Dispute Ends With US$332 Million Settlement
Attorneys’ Fees and Deductions From the Fund
On February 18, 2026, the court approved $99 million in attorneys’ fees, expenses, and costs for the plaintiffs’ legal team. Class counsel had asked for up to 29% of the total settlement.8Law360. Retirees’ Attys Get $99M Cut of Colgate-Palmolive ERISA Deal Litigation expenses, largely for actuarial expert work spanning more than a decade, were estimated at about $2.9 million. Settlement administration costs were capped at $150,000, and lead plaintiff Rebecca McCutcheon petitioned for a service award of up to $10,000.3Colgate Pension Class Action. Settlement Terms
The class was represented by the Gottesdiener Law Firm and Siri & Glimstad LLP, with Bredhoff & Kaiser appearing on appeal. Colgate-Palmolive was represented by Morgan, Lewis & Bockius and Cravath, Swaine & Moore.9ai-CIO. Colgate-Palmolive Longstanding Pension Calculation Case Settles for $332M
How the Case Reached Final Approval
Rebecca McCutcheon, who worked at Colgate from 1979 to 1994, filed an administrative claim for a residual annuity on July 30, 2014. Colgate’s Employee Relations Committee denied the claim in November 2014 and denied her appeal in June 2015.6Justia. McCutcheon v. Colgate-Palmolive Co. McCutcheon and co-plaintiff Paul Caufield filed suit on June 3, 2016 in the Southern District of New York under Case No. 1:16-cv-04170.10CourtListener. McCutcheon v. Colgate-Palmolive Co.
Colgate’s motion to dismiss was denied in February 2017, and class certification followed in July 2017.2Colgate Pension Class Action. History of the Case In August 2020, Judge Schofield granted summary judgment to the plaintiffs on the two central issues: the correct methodology for calculating the residual annuity and the improper use of a pre-retirement mortality discount.11PlanSponsor. McCutcheon v. Colgate-Palmolive Co., Decision
The Second Circuit affirmed those rulings in March 2023.5FindLaw. McCutcheon v. Colgate-Palmolive Co. After Judge Schofield entered a revised final judgment in April 2024, Colgate appealed a second time, raising new calculation arguments. On April 4, 2025, the Second Circuit rejected that appeal under the law-of-the-case doctrine, holding that Colgate had forfeited those arguments by not raising them earlier.12CaseMine. McCutcheon v. Colgate-Palmolive Co., No. 24-1419
The parties mediated on June 2, 2025 and filed a preliminary settlement agreement in September 2025. Judge Schofield granted preliminary approval in October 2025.13Bloomberg Law. Colgate Retirees Advance $332 Million Settlement in Pension Suit At the fairness hearing on January 12, 2026, no class members objected. Two days later, the court issued the final order and judgment, finding the settlement fair, reasonable, and adequate.1Justia. McCutcheon v. Colgate-Palmolive Co., Final Order and Judgment
If you believe you may be a class member and haven’t heard from the settlement administrator, or if you are the heir of a deceased former Colgate employee who took a lump sum, contact the administrator to confirm your status and, if applicable, request a Successor Information Form.