Plaintiffs Timothy Scott, Patricia Gilchrist, Karen Fisher, Helen Maldonado-Valtierra, Dan Koval, Judy D. Duff, John Griffin, Kenneth Rhodes, Judy Dougherty, John Kelly, Richard Walshon, Jennifer Fryer, and Vince Carabba alleged that Defendants AT&T Inc., the AT&T Defined Benefit Plan, and AT&T Services, Inc. (collectively AT&T) have violated the Employee Retirement Income Security Act of 1974 (ERISA).
Apparently, AT&T Defined Benefit Plan (the Plan) did not calculate and disburse “Joint and Survivor Annuities” (JSA) in a manner consonant with ERISA. Plaintiffs said that the Plan failed to treat JSA and Single Life Annuity (SLA) participants in an actuarily equivalent fashion by using “mortality assumptions” that are “fifty years out of date,” which resulted in the “payment of a benefit that is less” than the JSA beneficiaries were entitled to.
In response, Defendants filed a motion to exclude the opinions of Plaintiff’s proffered expert, Ian H. Altman, under Rule 702.
Actuarial Expert Witness
Ian H. Altman is a Fellow of the Society of Actuaries and an Enrolled Actuary. He was the founding partner and manager of Altman & Cronin Benefit Consultants, which was established in 1996. His firm merged with Gallagher Benefit Services, Inc. in 2016. Since his separation from Gallagher in 2020, he has worked as an independent consulting actuary in the employee benefits field.
Discussion by the Court
AT&T said that Altman’s opinions about the Plan’s conversion factors’ failure to achieve actuarially equivalent results is unreliable because his preferred methodology assertedly did not establish the “bottom” of the range of actuarially equivalent results, and the claim that his methodology is “conservative” rests on no more than ipse dixit.
However, the Court held that Altman relied on his decades of experience and reliable evidence about industry practice to opine that the Plan’s conversion factors do not generate actuarially equivalent JSA benefits because the underlying assumptions are outdated and unreasonable.
For Altman’s methodology for calculating “damages,” AT&T said that there are several discrete mistakes that render his opinion unreliable. However, Plaintiffs emphasized guidance in the Actuarial Standards of Practice (ASOP), published by the Society of Actuaries, that provided that an actuary may apply “judgmental adjustments or assumptions” where “accurate and complete [data] may not be available” so long as the use of such adjustments or assumptions is disclosed.
Altman adequately explained and disclosed the adjustments and assumptions he made when dealing with what he reasonably believed to be deficient data, and AT&T did not demonstrate those assumptions were so outlandish that no reasonable actuary would make them.
Altman also explained why, based on his experience, the pop-up benefit should not be considered, because it is a benefit separate from the JSA benefit that offers “no value to the surviving beneficiary.”
AT&T’s final objection goes to Altman’s inclusion of participants who received benefits in the form of both a partial lump sum and JSA is not grounds for exclusion, as the contention at bottom is not about his methodology’s reliability but about whether the resultant JSA benefits are “qualified” or subject to the statutory actuarial equivalency requirement despite the partial lump sum election.
Held
In conclusion, the Court denied the Defendants’ motion to exclude the opinions of Plaintiff’s proffered expert, Ian H. Altman, without prejudice to renewal at trial as to specific calculations, as the evidence and circumstances warrant.
Key Takeaway:
Altman’s opinions are grounded in evidence and sound actuarial methods and therefore will be put through the crucible of vigorous cross examination at trial.
Case Details:
| Case Caption: | Scott V. At&T Inc. Et Al |
| Docket Number: | 3:20cv7094 |
| Court Name: | United States District Court, California Northern |
| Order Date: | July 09, 2025 |
