The lawsuit was filed in 2007 by former employees of Midwest Generation LLC, a subsidiary of Southern California Edison Company (SCE), against the plaintiffs, SCE, parent company Edison International, Edison International Trust Investment Committee, SCE Benefits Committee, SCE's vice president of human resources and others involved in overseeing the funds, alleging violations of their fiduciary duty under the Employee Retirement Income Security Act (ERISA).
The ERISA class action lawsuit asserted the management of the employees 401(k) plans were mishandled, which cost them in excess of $7 million. Specifically, plaintiffs alleged plan administrators bought retail shares in March 1999 instead of institutional shares, which would have incurred lower fees. They also alleged SCE used monies from the retail shares to offset plan management costs charged by its record-keeper, Hewitt Associates, LLC.
While a lower court ruled three of the funds invested after 2001 should have been purchased as institutional shares, it also ruled that the statute of limitations applied to some of the claims.
The lawsuit has taken a decade to resolve, ultimately providing plaintiffs with awards for losses incurred plus entitlement to additional damages, and attorney fees.
