General Electric has agreed to settle a 6-year-old lawsuit filed by 401(k) plan participants who accused the company and fiduciaries of ERISA violations due to plan mismanagement.
An agreement-in-principle notice was filed Aug. 3 in a U.S District Court in Boston. No terms were discussed in the settlement of a class-action suit, In Re: G.E. ERISA Litigation, a consolidation of four similar lawsuits originally filed in 2017.
"Plaintiffs have concurred with counsel for defendants who consent to this request," said the notice filed by several attorneys for plaintiffs. No timetable was disclosed in the notice, other than the promise to file details with the court "as soon as practicable."
The complaint focuses on five proprietary General Electric investments, which plaintiffs alleged were expensive, poor performers. They criticized plan executives for failing to adequately monitor these investments which were provided by a wholly-owned subsidiary of General Electric. The company sold the subsidiary, GE Asset Management, to State Street Corp. in July 2016. State Street isn't a defendant.
Plaintiffs said this arrangement benefited General Electric at the expense of the participants, adding that such a relationship was a prohibited transaction under ERISA. Defendants denied all allegations.
Plaintiffs contend that these ERISA violations affect any participant who invested in one or more of the five funds since Sept. 26, 2011.
The GE Retirement Savings Plan, Norwalk, Conn., had assets of $30.4 billion as of Dec. 31, 2021, according to the latest Form 5500.