A global security and aerospace company is settling after former employees complained about their retirement plan.
Advisors should take heed of the travails of Lockheed Martin.
The global security and aerospace company, is in settlement talks with former employees that alleged the company imposed excessive retirement plan fees.
According to court documents, in a pretrial order signed by the chief judge, both parties in the Abbot v. Lockheed Martin case “have reached a provisional settlement,” formally cancelling the bench trial.
The class-action lawsuit, first filed in 2006, included participants within the company’s two defined contribution plans. The workers alleged that Lockheed Martin’s in-house investment management company exposed plan members to improper investment options. Court documents from Aug. 2013 highlight participants had access to a stable-value fund and company stock options.
“Lockheed’s SVF [stable-value fund] was heavily invested in short-term money market investments. This resulted in a low rate of return, such that in Lockheed’s own words, the SVF did ‘not beat inflation by a sufficient margin to provide a meaningful retirement asset,’” the complaint stated.
At the time, plaintiffs contended “that structuring the SVF in this manner amounted to imprudent management and violated Lockheed’s duty to manage the plan “with care, skill, prudence, and diligence under the circumstances.”
The global security and aerospace company, is in settlement talks with former employees that alleged the company imposed excessive retirement plan fees.
According to court documents, in a pretrial order signed by the chief judge, both parties in the Abbot v. Lockheed Martin case “have reached a provisional settlement,” formally cancelling the bench trial.
The class-action lawsuit, first filed in 2006, included participants within the company’s two defined contribution plans. The workers alleged that Lockheed Martin’s in-house investment management company exposed plan members to improper investment options. Court documents from Aug. 2013 highlight participants had access to a stable-value fund and company stock options.
“Lockheed’s SVF [stable-value fund] was heavily invested in short-term money market investments. This resulted in a low rate of return, such that in Lockheed’s own words, the SVF did ‘not beat inflation by a sufficient margin to provide a meaningful retirement asset,’” the complaint stated.
At the time, plaintiffs contended “that structuring the SVF in this manner amounted to imprudent management and violated Lockheed’s duty to manage the plan “with care, skill, prudence, and diligence under the circumstances.”
