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December 15, 2014 at 04:55 AM
(Bloomberg) — Lockheed Martin Corp., builder of the Orion spacecraft that may one day take people to the Mars, is fighting claims it mismanaged retirement benefits because employees ended up with smaller returns from company stock than outside investors.
The workers accuse the aerospace and defense contracting company’s in-house investment manager of subjecting them to excessive fees and under-delivering on performance. That allowed outside investors to earn better returns than participating employees, according to the lawsuit.
Lockheed’s retirement plans serve about 120,000 employees and retirees and manage $26 billion in assets, said Jerome Schlichter, a lawyer for the workers. The company calls the plans “among the nation’s largest and most complex.”
Eight years after the lawsuit was filed, Lockheed will face off against Schlichter’s firm at a nonjury trial set to start Monday in federal court in East St. Louis, Illinois. The law firm has waged similar cases with mixed success against Swiss generator-maker ABB Ltd., power-generating company Exelon Corp. and Caterpillar Inc., the Peoria, Illinois-based maker of earth- moving equipment.
Schlichter initially won an award of more than $35 million against ABB’s U.S.-based unit and Fidelity Management Trust Co. Last month, the U.S. Supreme Court declined to reinstate $21.8 million that was cut from that in an appeal.
The Caterpillar case settled for more than $16 million in 2010. The case against Chicago-based Exelon was thrown out.
