General Electric, Retirement Plan Trustees Pegged with ERISA Class Action [UPDATE]
Last Updated on October 26, 2023
Haskins et al. v. General Electric Company et al.
Filed: September 26, 2017 ◆§ 3:17-cv-01960-CAB-BLM
A lawsuit filed on behalf of GE's 401(k) retirement plan participants claims administrators put their own interests in front of those of future retirees.
California
October 26, 2023 – $61 Million GE Retirement Plan Lawsuit Settlement Given Preliminary Approval
United States District Judge Indira Talwani granted preliminary approval to a $61 million settlement resolving the proposed class action lawsuit detailed on this page.
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The deal, which received preliminary approval from the court on October 20, 2023, covers:
“All persons who were participants in or beneficiaries of the GE 401(k) Plan a/k/a GE Retirement Savings Plan and its predecessor the GE Savings and Security Program, as well as participants whose accounts were transferred from the GE Retirement Savings Plan and merged into a successor plan created in connection with the spinoff of a GE company … and who were at any time between September 26, 2011 to [sic] August 3, 2023 … invested in the GE Institutional Strategic Investment Fund (a/k/a State Street Institutional Strategic Investment Fund), the GE Institutional Small Cap Equity Fund (a/k/a State Street Institutional Small Cap Equity Fund), the GE Institutional International Equity Fund (a/k/a State Street Institutional International Equity Fund), the GE RSP Income Fund (a/k/a State Street Income Fund), or the GE RSP U.S. Equity Fund (a/k/a State Street U.S. Core Equity Fund).”
According to a memo submitted in support of the settlement, the deal is the largest ever in a case alleging a retirement plan improperly offered participants and beneficiaries proprietary funds. Lawyers told the court that the $61 million cash settlement amount represents roughly 21.5 percent of the damages incurred by proposed class members, “which is at the higher end of the range of settlement recoveries in other [Employee Retirement Income Security Act] class action settlements.”
Court documents state that consumers who are covered by the settlement will receive payment automatically and do not need to do anything, i.e., file a claim, in order to receive compensation. However, former participants can elect to receive their payment in the form of a rollover into an eligible retirement account by filling out a rollover form that will be mailed or emailed to them and available on the official settlement website, ge401ksettlement.com, once it goes live.
The amount due to eligible consumers will be calculated automatically by the settlement administrator based on the funds they invested in, how much money was invested and for how long.
According to court documents, the settlement administrator will begin to send emailed and mailed notices to those covered by the deal by December 7, 2023.
A final approval hearing is scheduled for March 7, 2024. It is typically after a settlement receives final approval, and any appeals or objections are resolved, that payments begin to go out to class members.
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A proposed class action filed against General Electric Company (GE) and its Retirement Savings Plan Trustees alleges the parties breached their fiduciary duties to plan participants (and participants in its predecessor plan) by engaging in what the case describes as “prohibited transactions and unlawful self-dealing” in violation of federal law. The 47-page complaint mentions the following five specific funds that were allegedly mismanaged:
- GE Institutional International Equity Fund
- GE Institutional Strategic Investment Fund
- GE RSP U.S. Equity Fund
- GE RSP U.S. Income Fund
- GE Institutional Small Cap Equity Fund
The lawsuit’s three named plaintiffs allege they and other 401(k) plan participants, of which the case says there are almost a quarter of a million, suffered harm as a result of GE management and plan administrators’ alleged selection of poor-to-mediocre-performing investment options. According to the suit, the defendants encouraged proposed class members to invest their 401(k) assets into GE’s proprietary mutual funds, from which the defendants would allegedly stand to earn significant revenues from investment management fees charged to plan participants.
“The plan’s participants trusted GE to construct a 401(k) plan that prioritized their interests over its profits and that offered superior investment options and world-class investment management,” the complaint laments. “Instead, GE prioritized profit over its fiduciary duty and saddled the plan’s participants with substandard proprietary mutual funds.”
The multi-layered lawsuit goes on to describe the defendants’ alleged actions as “imprudent and disloyal,” and claims the defendants earned hundreds of millions of dollars while retirement plan participants incurred roughly the same amount in losses.
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