FedEx Retirees Say They Lost Hundreds a Month in Pension Payments, Judge Allows Lawsuit

FedEx retirees who claim they were shortchanged hundreds of dollars each month in pension payments can move forward with their proposed class action after a Tennessee federal judge rejected the company's latest attempt to dismiss the case.

U.S. District Judge Thomas L. Parker ruled on October 15, 2026, that the former pilots had sufficiently supported claims that FedEx used outdated life expectancy assumptions to calculate their retirement benefits. One plaintiff alleges that the company's formula left him receiving approximately $686 less each month than federal pension law requires.

Robert Watt, a former FedEx pilot, claims his monthly pension should be $685.94 higher under calculations using federal Treasury assumptions. Fellow retiree Gary Friesen alleges a shortfall of $468.44, while Craig Covic claims he is owed an additional $393.99. Two other former pilots, Michael McKenna and Geoffrey Coe, allege monthly losses of $381.55 and $181.42, respectively.

The retirees filed their lawsuit in September 2023 against FedEx, its employee pension plan and the board responsible for administering retirement benefits. They seek recalculated payments, recovery of alleged underpayments and other relief on behalf of similarly situated pensioners.

The dispute centers on mortality tables and interest rates used to convert a single-life pension into a joint-and-survivor annuity, which continues providing benefits to a spouse after a retiree's death. The FedEx plan uses a mortality table known as UP-84, based on data from the 1970s, that the plaintiffs argue fails to reflect modern life expectancy.

Under the Employee Retirement Income Security Act of 1974, known as ERISA, qualifying joint-and-survivor annuities must have an overall value equivalent to a pension paid only during the retiree's lifetime. Monthly payments under the survivor option are generally smaller because they account for potential payments to a surviving spouse. The plaintiffs allege that FedEx's outdated assumptions reduced those payments beyond what federal law allows.

FedEx initially persuaded Parker to dismiss the case, arguing that ERISA does not require employers to use particular mortality tables or actuarial assumptions when calculating pension benefits.

The U.S. Court of Appeals for the Sixth Circuit reversed that decision on March 16, 2026, finding that the law requires pension plans to use reasonable actuarial assumptions. The ruling revived the retirees' claims and returned the case to Parker to address additional arguments FedEx had raised.

In its renewed dismissal motion, FedEx challenged the retirees' calculations, arguing that they had compared their payments against an incorrect measure of accrued benefits. The company also disputed claims involving retirees who selected annuities providing their surviving spouses with 100% of their monthly pension payments.

Parker rejected those arguments, finding that the former pilots had adequately alleged that their survivor benefits were worth less than the single-life pensions available to them when they retired. He also ruled that the plan's 100% survivor arrangements remained subject to ERISA's actuarial equivalence requirements.

The judge allowed related fiduciary-duty claims to proceed against FedEx and its pension investment board. The retirees allege that the defendants breached their responsibilities by administering a plan that provided improperly calculated benefits.

The latest ruling follows Parker's September 25, 2026, decision denying FedEx's request to pause discovery while the dismissal motion remained pending. The judge found that the company had failed to establish a sufficient need for further delay in the litigation.

FedEx has also asked the U.S. Supreme Court to review the Sixth Circuit's interpretation of ERISA. In a petition filed September 14, 2026, the company argues that the appellate court improperly imposed a reasonableness requirement on actuarial assumptions that is absent from the statute's text.

The Supreme Court petition is scheduled for consideration at the justices' November 6 conference. Meanwhile, the Tennessee case is moving through discovery, allowing the retirees to seek records and other evidence concerning the pension calculations they are challenging.