A federal court in Los Angeles has dismissed a lawsuit against Northrop Grumman Corp. alleging it breached its fiduciary duties when it failed to provide participants in its pension plan with accurate information regarding the amount of their pension benefits.
Plaintiffs Stephen and Laura Bafford claimed that Northrop issued Mr. Bafford pension benefit statements showing that if he worked to at least 55 and elected a 100% joint-and-survivor annuity form of benefit, he would receive lifetime monthly payments of more than $2,000, according to the complaint filed Dec. 7. When Mr. Bafford retired and began receiving his pension, however, he was notified that Northrop had provided incorrect information and that his actual benefit was only $807.79 a month, the plaintiffs alleged.
The plaintiffs claimed that Northrop and the administrative committee breached their fiduciary duties by acts and omissions including failing to ensure that participants were provided with "complete and accurate information regarding the amount of the Northrop plan benefit."
They filed the lawsuit against Northrop, its administrative committee and Alight Solutions, whose predecessor, Hewitt Associates, provided record-keeping and third-party administration services to the plan.
On Tuesday Judge Otis D. Wright II dismissed all claims largely on the grounds that the complaint lacked sufficient facts. For example, in tossing the claim that the administrative committee violated its fiduciary obligations by providing inaccurate pension statements to the plaintiffs, the judge noted that ERISA section 105(a) requires plan administrators to provide participants with a pension benefit statement every three years or upon written request. Since the plaintiffs stated that they used an online platform to request the benefit statements — and did not “specify whether they actually made any written requests” — they “failed to adequately plead a cause of action in accordance with ERISA section 105(a),” the judge wrote in his ruling.
He didn’t completely close the door on the case, however, giving the plaintiffs 21 days to amend their complaint.
