A settlement has been reached with Maxwell for USD $300,000.
A settlement has been reached with Maxwell for USD $300,000.
Settlement Class Members who wish to apply for compensation under the settlements must apply no later than January 15, 2020. Claims that are not made…
A settlement has been reached with PLDS totaling over $5 million.
Class Counsel’s main goal in deciding how much money to give each claimant was to share the settlement funds fairly and with regard to how much each claimant could reasonably expect to get if this lawsuit had gone to trial.
Class Counsel were essentially trying to answer one of the fundamental questions in the lawsuit: “How much did class members lose because of the misrepresentations?” This is not the same as asking “How much did class members lose because of converting to the DC plan?” The risks discussed above, especially reliance risk (see FAQs #10-14) make up the difference between these two questions.
Class Counsel hired actuaries to help us calculate how much money to give claimants.
The amounts are calculated in four steps:
(a) estimating of each claimant’s gross loss from converting to the DC plan
(b) applying the risks, especially reliance risk (see FAQs #10-14)
(c) adding prejudgment interest for some class members
(d) reducing everyone’s amounts to fit all claims within the available settlement funds.
Each step is described below, along with Class Counsel’s reasons for it.
This part of the calculations looks at the difference between what you would have had if you had stayed in the DB plan, and what you have instead after converting to the DC plan. Basically it answers the question “How much did class members lose because of converting to the DC plan?”.
As noted above, that question on its own is not enough to fairly divide the settlement funds among claimants with regard to what each claimant could reasonably have received if this lawsuit had gone to trial. However, it does provide us with a number to which we can apply the risks, especially reliance risk (see FAQs #10-14) to get us closer to a fair division.
The actuaries did this calculation using the information that Teck Metals/Cominco and Agrium provided and some assumptions (see FAQs # 21&22 for more information about the assumptions and why we used them).
All of the calculations are based on one of two dates:
We separated claimants into groups based on their ages in 1992 and number of years of service in 1992. The groups are for five-year brackets. For each group the experts calculated the losses as a percentage of that cohort’s average 1992 salary.
To get each claimant’s gross losses, the experts multiplied that percentage by the person’s salary in 1992 and the number of years they worked for Teck Metals/Cominco and/or Agrium.
It is important to remember that your gross loss is not the amount you will get from the settlement. This is because there are other factors besides this calculation that affect what the law would say that you lost. Those factors include the risks discussed in FAQs #10-14.
When we calculated this step, we found that some claimants seem to have actually done better in the DC plan than they would have in the DB plan. That is, they have more money now than they would have had if they had stayed in the DB plan. If the Court approves the distribution protocol, the claimants who Class Counsel is reasonably confident did at least 25% better under the DC plan than they would have under the DB plan will get $0. See FAQ#24 for more information. The rest of the calculation steps described below do not apply to these claimants.
This step is important because it reflects the different risks that different class members faced. As described in FAQs # 10&14, some class members faced more risk that others. In particular, younger class members faced a large risk that they would not be able to prove that they relied on the misrepresentations. In contrast, class members who were nearing retirement faced a smaller risk on the same issue.
To accommodate for this, we set up “adjustment groups” based on the ages of class members in 1992.
|Adjustment Group||Age Bracket in 1992||Percentage of Gross Claim|
These percentages are largely based on the estimates that Towers made before the conversion of how many people of different ages would actually convert. So, for instance, Towers expected almost everyone aged 20-24 to convert. Therefore we calculated that only 5% of people converted because of the misrepresentations.
To carry out this step of the calculation, the experts applied the adjustment risk percentage for each claimant to that claimant’s gross claim. For example, for a claimant who was 33 in 1992, the calculation at this step would give them 15% of their gross claim from step (a).
Applying these risk adjustments does mean that the claimants who actually converted only receive a percentage of their losses, while claimants who would have converted anyway get money that they would not get after a trial. Class Counsel still think this is the right way to do this calculation because it would take a long time and be very expensive for us to get all claimants to prove that they converted because of the misrepresentations, and to decide who makes the cut and who does not.
If we had gone to trial, claimants who left their employment before September 30, 2014 would have been entitled to a small amount of interest. This is called pre-judgment interest. We have added it where appropriate so that the amounts reflect what claimants would have received at trial.
There is a very important difference between what claimants could have gotten if this lawsuit had gone to trial, and what we actually got in settlement. The difference is that the settlement is a fixed amount – there is no more money. But our calculations in steps (a)-(c) result in a larger total number than we have in settlement funds. This is because, as discussed in FAQ#7, the settlement amount is not calculated.
Because of that, we have to fit all claimants’ payments within the amount of money we have to distribute.
The amount to distribute will not be $4 million. Class Counsel’s fees and expenses, as well as some other costs, have to be paid out first. See FAQ#37, 42, 47 & 48 for more information on what else will be paid from the settlement funds.
To fit all claimants’ payments within the amount of money we have to distribute, we calculated the total after steps (a)-(c). Then, for each claimant, we calculated what percentage their amount after steps (a)-(c) was of the total.
For the estimates in the June letters, we then multiplied that percentage by the amount we estimate we will have to distribute. As discussed in FAQ#25, and except the claimants who will get $0 (see FAQ#24), claimants will get a minimum of $500.
After the July 24 hearing, once we know what the Court orders, we will calculate the actual amounts for each claimant.