CalPERS Lifetime-Only Settlement

You received a Class Action Notice because CalPERS' records show that you purchased a Long Term Care ("LTC") insurance policy from CalPERS and had your premiums increased in 2013. Specifically, the class includes anyone who was a California citizen in February 2013, that holds or held an LTC Policy issued by CalPERS that included lifetime benefits but did not include automatic inflation protection benefits, and that was subject to an 85% premium increase announced by CalPERS in 2013.

This website and the Class Notice explains the Action, the Settlement, and your legal rights. The lawsuit is known as Holly Wedding, et al. v. California Public Employees' Retirement Fund, and is pending in the Superior Court of California for the County of Los Angeles, Case No. BC517444 (the "Action").

In 1995, CalPERS began selling LTC policies to Class Members. In February 2013, CalPERS announced that it was increasing the premiums for certain policies sold between 1995 and 2004 by 85% and that these rate increases would be implemented in 2015 and 2016. The lawsuit generally alleges that it was improper for CalPERS to impose this 85% rate increase. CalPERS denies that it did anything improper and denies that anything it may have done caused injuries to the Class.

In a class action, one or more people called the "Plaintiff(s)" sues on behalf of people who have similar alleged claims. Together, all these people are a "class," and each person is a "class member." The Court resolves the issues for all class members, except for those who exclude themselves from the Class. On January 28, 2016, the Honorable Jane Johnson issued an order certifying a class in this case.

"Settlement Class Members" or the "Settlement Class" means all persons who meet all of the following criteria:

1. Were citizens of California in February 2013.
2. Purchased an LTC Policy from CalPERS during the period 1995 to 2004 that included lifetime benefits but did not include automatic inflation protection benefits.
3. Were subjected to the 85% premium increase announced by CalPERS in 2013 and implemented in 2015 and 2016.

Policyholders who converted their policies to LTC3 Policies prior to the implementation of the 85% premium increase are not included in the Settlement Class, even if the conversion occurred after the increase was approved by the CalPERS Board in October 2012. The Settlement Class also does not include those individuals who opted out of the Class certified by the Court on January 28, 2016.

In or around 2004, CalPERS began selling the LTC3 Policy. This policy had different terms and a different premium structure than LTC1 or LTC2 Policies. It also offered Policyholders who had previously purchased either LTC1 or LTC2 Policies the option of converting those policies to an LTC3 Policy. Importantly, those Policyholders who converted to LTC3 policies were not subjected to the 85% premium rate increase and are therefore not a part of the Settlement Class. If you have questions as to whether you have converted to an LTC3 Policy, we recommend that you contact CalPERS and/or the Illumifin.

Automatic Inflation Protection means that a policyholder's daily benefit would automatically increase by a certain percentage every year—for most CalPERS policyholders it was 5%—without any corresponding increase in the premiums charged for the policy.

Lifetime Coverage refers to the length of time that the policyholder is covered rather than the amount of the coverage. A policyholder with Lifetime Coverage means that a policyholder could apply the daily or monthly benefit maximums in their policy for the rest of their life, instead of for a set term, such as 5 or 10 years. However, their daily or monthly benefit would not automatically increase.

Of the approximately 100,000 policyholders at issue in this case, about 80,000 purchased Automatic Inflation Protection Policies. Their claims were settled in 2023. The remaining ~16,000 class members with Lifetime-Only Policies had their claims eliminated by the trial court's July 2020 ruling, and only recently reached this proposed settlement following the filing of the appeal.

Originally, this litigation involved all LTC policyholders whose premiums were increased in 2013. However, after the Class was certified as a Class Action CalPERS sought to dismiss the claims of certain Class Members whose policies did not include Automatic Inflation Protection. In 2020 the Court ruled in CalPERS' favor and found that policyholders who did not have Automatic Inflation Protection could not proceed with their claims against CalPERS. However, the claims of policyholders with Automatic Inflation Protection could go forward.

In 2023, CalPERS agreed to settle the claims of policyholders who had Automatic Inflation Protection but refused to settle the claims of policyholders without Automatic Inflation Protection. The settlement with policyholders who had Automatic Inflation Protection is a separate and distinct settlement and is not applicable to policyholders without Automatic Inflation Protection.

Originally, this litigation involved all LTC policyholders whose premiums were increased in 2013. However, after the Class was certified as a Class Action CalPERS sought to dismiss the claims of certain Class Members whose policies did not include Automatic Inflation Protection. In 2020 the Court ruled in CalPERS' favor and found that policyholders who did not have Automatic Inflation Protection could not proceed with their claims against CalPERS. However, the claims of policyholders with Automatic Inflation Protection could go forward.

After the court dismissed the claims of policyholders without Automatic Inflation Protection, the attorneys representing the Class filed an appeal for this group of Class Members. Because the claims of policyholders without Automatic Inflation Protection were dismissed by the Court they receive less than Class Members whose claims were not dismissed by the Court.

Under the terms of the Settlement, CalPERS will pay $5,100,000 into a Qualified Settlement Fund ("QSF") that will be maintained by the Settlement Administrator. From this Settlement Fund, there will be deductions for administration expenses (estimated at $308,000) and Class Counsel's litigation expenses (not to exceed $45,000). All remaining funds will be prorated among all Settlement Class Members with Lapsed Policyholders receiving one-third (1/3) of the amount apportioned to Current Policyholders.

Current Policyholders are those who are currently paying premiums to CalPERS for their policy or are currently on-claim. Lapsed Policyholders are those who do not have an active policy with CalPERS and are not paying premiums because their policy has lapsed. The date for determining whether someone is a Current or Lapsed Policyholder is May 7, 2025.

Based on the foregoing, it is estimated that Current Policyholders will receive a payment of approximately $375, and Lapsed Policyholders will receive payments of approximately $125.

It is estimated that payments to Settlement Class Members will be made within 90 calendar days following the date that the Settlement becomes Final. "Final" will mean the latest of the following dates, as applicable: (i) expiration of all potential appeal periods without a filing of a notice of appeal of the final approval order or judgment; or (ii) final affirmance of the final approval order and judgment by an appellate court as a result of any appeal(s); or (iii) final dismissal or denial of all such appeals (including any petitions for review, rehearing, certiorari, etc.) such that the final approval order and judgment is no longer subject to further judicial review.

Following distribution of the individual settlement payments, any uncashed checks issued to Settlement Class Members will be sent to CalPERS and be added into the CalPERS Long Term Care trust fund.

If you believe CalPERS' records have incorrectly categorized you as a Current Policyholder or Lapsed Policyholder, you can dispute the categorization by submitting a written statement along with any supporting documentation to the Settlement Administrator.

Under the term of the Settlement, in exchange for the Settlement payment, Settlement Class Members will release CalPERS and its representatives, employees, or affiliates, from any and all claims arising from or related to the 85% premium increase announced in 2013.

Subject to the Court's final approval of the terms of the Settlement, any Settlement payment you are entitled to under the Settlement Agreement will automatically be mailed to you at the address where this Notice was mailed (unless you timely provide a forwarding address to the Settlement Administrator). As explained above, you will give up your claims in this case in exchange for this Settlement payment.

Checks will be mailed to eligible Settlement Class Members after the Court grants "final approval" of the Settlement and the Settlement becomes Final. If the Court approves the Settlement after a hearing on July 24, 2025 (see "The Court's Final Approval Hearing" below), there may be appeals. If there are any appeals, resolving them could take some time, so please be patient. If there is an appeal, the settlement website will be updated. If there is no appeal, then the Settlement will become Final and effective 60 days after the Court grants final approval. Class counsel estimates that checks will be mailed to eligible class members within 90 days after the Settlement becomes Final.

Please also be advised that you will only have 90 days from the date that the checks are issued to cash the check. If you do not cash your check within 90 days of the date of its issuance, your individual Settlement check will be voided. You will be permitted to request the reissuance of the check from the Settlement Administrator for a period of up to 30 days thereafter.

The Court has appointed the following lawyers to serve as Class Counsel for the Settlement Class:

Class Counsel will not be seeking any attorneys' fees associated with this settlement and will only seek payment for unreimbursed litigation expenses that are no more than $45,000. The estimated cost of administering the settlement is $308,000. These costs will be deducted from the total $5,100,000 Settlement amount, and all remaining funds will be distributed to Settlement Class Members. A request will be made to the Court for approval of Class Counsels' litigation expenses. The Court may award less than the amount requested.

Any Settlement Class Member may object to the proposed Settlement, or any portion thereof, by mailing a written objection, and supporting papers, to the Settlement Administrator at the following addresses by regular U.S. Mail postmarked no later than June 20, 2025:

ILYM Group, Inc.
P.O. Box 2031
Tustin, CA 92781

A written objection must contain: (1) the case name and number for this action, (2) the full name of the objecting Settlement Class Member, (3) the Settlement Class Member's CalPERS LTC policy number, (4) the basis for the objection, (5) if the Settlement Class Member intends to appear at the Final Approval Hearing (see response to Questions 18-20 below), and (6) the identity of the Settlement Class Member's counsel, if any. If a Settlement Class Member wishes to appear at the Court's Final Approval Hearing and orally present his or her objection to the Court, the objector's written statement should include the objector's statement of intent to appear at the Court's Final Approval Hearing. Notwithstanding, in the discretion of the Court, the objection of any Settlement Class Member, or person purporting to object on behalf of any Settlement Class Member, may be received or considered by the Court at the Final Approval Hearing, regardless of whether a written notice of objection is mailed to the Settlement Administrator.

You must be a Settlement Class Member to object to the Settlement. Objections from those who requested exclusion from the Class or who do not qualify to participate in the Settlement will not be considered. Any Settlement Class Member who submits an objection remains eligible to receive monetary compensation from the Settlement.

No. The Class in this case was certified on January 28, 2016, and the deadline to exclude yourself from the Class expired on October 14, 2016.

The Court will hold a "Final Approval Hearing" on July 24, 2025 at 1:30 p.m, in Department 10 at the Superior Court of California for the County of Los Angeles, located at 312 N. Spring St., Los Angeles, 90012. The hearing may be moved to a different date and/or time without additional notice, but any change of date or time will be posted on the Settlement website at www.calperslifetimeonlysettlement.com. At this hearing, the Court will consider whether the Settlement is fair, reasonable, and adequate. If there are objections, the Court will consider them. The Court will also decide how much to pay Class Counsel for their litigation expenses (but Class Counsel is not seeking, and the Court will not award any attorneys' fees). After the hearing, the Court will decide whether to approve the Settlement. It is unknown how long these decisions will take.

No. Class Counsel will answer any questions the Court may have. But you are welcome to come at your own expense. If you submit an objection, you do not have to come to the hearing to talk about it. So long as you have mailed a timely written objection, the Court will consider it. You may also pay (at your own expense) another lawyer to attend for you, but it is not required.

If you wish to appear at the Final Approval Hearing and orally present your objection to the Court, you should state in your written objection that you intend to appear at the Final Approval Hearing. Notwithstanding, in the discretion of the Court, the objection of any Settlement Class Member who has not requested exclusion, or person purporting to object on behalf of any Settlement Class Member, may be received or considered by the Court at the Final Approval Hearing, regardless of whether a written notice of objection is mailed to the Settlement Administrator.

If you do nothing, you will receive the benefits provided for in the Settlement if it is approved by the Court and becomes Final.

Settlement payments will be sent to the address where the Class Notice was mailed. It is your responsibility to advise the Settlement Administrator if you move or your contact information changes. You can provide your updated contact information by sending the information to the Settlement Administrator at: calpers@ilymcases.com

When contacting the Settlement Administrator, please provide your ILYM ID from your Notice. Please note that updates provided to the Settlement Administrator will only update their records, which relate to communications and mailings in conjunction with this Settlement. These updates are not provided to the CalPERS LTC program.

This notice summarizes the Settlement. More details are in the Settlement Agreement and filings made before the Court. Such documents are accessible at: www.calperslifetimeonlysettlement.com. You may also contact the Settlement Administrator for more information.

Do not contact the Court, CalPERS or Illumifin regarding this Notice or the Settlement.