When most people first learned about a Colgate-Palmolive lawsuit, they most likely thought it had to do with toothpaste. Perhaps a disagreement over labels. An overly dramatic whitening claim. Rather, it proved to be something much less visually appealing and, in many respects, much more significant. a pension computation. A 2005 drafting decision. 1,177 retirees in this class had spent years questioning whether the figures on their previous benefit statements were accurate in the first place.
After legal fees and other costs, the retirees will receive roughly $232.7 million of the $332 million settlement. The Southern District of New York has been involved in the McCutcheon v. Colgate-Palmolive case since 2016, but its origins date back to 1989, when Colgate changed its traditional pension plan to a cash balance plan. At the time, that type of conversion was typical. Long-term commitments were being reconsidered by businesses, and lump-sum payments felt contemporary, tidy, and almost comforting. It appears that no one thoroughly double-checked the math.
It’s easy to overlook the extent to which corporate America still relies on documents created decades ago. The original plan designers at Colgate’s Park Avenue offices are long retired. The case’s central document, the 2005 residual annuity amendment, was intended to address a previous deficiency. Rather, it brought in new ones. During settlement negotiations, the plaintiffs’ attorneys, who had been pursuing an earlier claim against the business since 2007, discovered something that didn’t add up. In a sense, that observation is the whole story.
Reading the court documents gives the impression that this case was almost never going to come up. Most employees won’t ever see residual annuity calculations because they are hidden in actuarial tables. This type of error does not appear on a quarterly statement or pay stub. It is concealed in formulas. It is concealed in footnotes. And it remained mostly undiscovered for thirty years.
In 2020, the retirees received partial summary judgment from a federal judge. In 2023, the Second Circuit upheld. The parties eventually came to an agreement in May 2025 following a thirteen-hour mediation session and a revised judgment in 2024. Colgate, on the other hand, denied any wrongdoing and stated that it reached a settlement in order to reduce risk and expense—a phrase that businesses frequently use in these situations. The fact that the business had discreetly set aside funds in the first quarters of 2023 and 2025 implies that the result wasn’t totally unexpected.
The magnitude of the recovery in relation to the underlying claim is remarkable. Over 97% of the total residual annuity amounts at risk are represented by the settlement. In ERISA litigation, where defendants frequently wear down plaintiffs through procedural attrition and delay, that kind of figure seldom occurs. It didn’t work here. The violations were overly well documented, and the record was overly detailed.
It’s difficult not to wonder how many other sizable pension plans have comparable issues. Decades of changes, rewrites, freezes, and conversions. Every new layer leaves space for discrepancies that go unnoticed until a lawyer somewhere decides to go through a thirty-year-old plan document line by line. The majority never do.
The money is real and long overdue for the retirees themselves, many of whom are now in their seventies and eighties. Some have talked about years of waiting for clarity. Some said they just wanted to be heard. Payments are anticipated to proceed through the plan’s administrators following the January 2026 fairness hearing.
Supermarket shelves will continue to be stocked with Colgate’s other brands, including Hill’s Pet Nutrition, Speed Stick, and Tom’s of Maine. The toothpaste continues to sell. However, a much older duty has at last been recognized somewhere in a New York courtroom. It’s still unclear exactly what that means, but the fact that it took nearly two decades of litigation to get there says something.
