General Electric recently agreed to pay $61 million to settle claims that its underperforming retirement plan cost its employees millions of dollars. The settlement document was filed on Oct. 6 with a U.S. District Court in Boston.
The plaintiff class includes employees who invested in at least one of five challenged mutual funds from Sept. 26, 2011 through Aug. 3, 2023.
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Largest Settlement in Retirement Plan Case
The plaintiffs in the 2017 class action in federal court moved for a judge's approval of the settlement, saying it was the largest settlement ever in a lawsuit alleging mismanagement of an in-house retirement plan. The deal must be approved by a federal judge.
The lawsuit alleged that five retirement funds managed by GE Asset Management (GEAM) were the only actively managed options available to retirement plan participants. Since at least 2011, the funds underperformed relative to comparable investment options, leading hundreds of thousands of plan participants to lose an estimated $283 million, the lawsuit claimed.
The plaintiffs accused GE of breach of fiduciary duty and engaging in prohibited transactions in violation of the federal Employee Retirement Income Security Act of 1974 (ERISA). GE has denied wrongdoing. The company has said that federal law expressly permits employers to offer in-house mutual funds in their retirement plans.
(Reuters)
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