Updated at 4 p.m. Sept. 27, 2017
Three General Electric employees are suing the industrial giant in federal court in San Diego, alleging that returns from retirement fund investments were weak even as the company made significant profits from management fees.
Kristi Haskins and Laura Scully of San Diego, and Donald Janak of Carrolton, Texas, are the named plaintiffs in a proposed class-action lawsuit against General Electric Co., General Electric Retirement Savings Plan trustees and 30 unnamed defendants.
They claim violations of the Federal Employee Retirement Security Act, alleging the defendants breached their fiduciary duties, and engaged in prohibited transactions and unlawful self-dealing detrimental to the three named plaintiffs individually and as representatives of a class.
“GE and the plan’s trustees were obligated by law to act for the exclusive benefit of plan participants and beneficiaries,” said the plaintiffs’ lawyer, Charles Field.
“(The act) required them to select prudent investments, monitor the investments’ performance, and modify the plan’s investment options to maximize the benefits to the participants and beneficiaries. Instead, they selected poor- to-mediocre-performing investments, and managed and administered them in ways that harmed the participants and beneficiaries,” Feld alleged.
A GE spokeswoman released a statement that reads: “We have no comment on ongoing litigation but we intend to fully defend the case.”
According to the complaint, the plaintiffs were among nearly 250,000 GE employees participating in the plan from Jan. 1, 2011, through June 30 of last year who were victimized by the alleged ERISA violations. Each year, GE employees collectively invested billions of dollars, the plaintiffs’ lawyers said.
They’re asking the court to find that GE breached its fiduciary duty and require the company to make the plan whole for $700 million in losses resulting from each alleged breach, and to restore the plan to the position it would now hold if the alleged violations had not occurred.
They also ask for the plan to be reformed so it complies with federal law and remove fiduciaries who have allegedly breached their duties.
The five funds named in the complaint are the GE Institutional International Equity Fund, GE Institutional Strategic Investment Fund, GE RSP U.S. Equity Fund, GE RSP U.S. Income Fund and GE Institutional Small Cap Equity Fund.
— City News Service
