Retirees Sue SEMPRA Energy For Breach of SERP Contract

May 26, 2004 ( - A group of retired officers of San Diego Gas & Electric (SDG&E) has filed a lawsuit against SEMPRA Energy and its SDG&E subsidiary for the company's alleged failure to adjust benefits under a Supplemental Executive Retirement Plan (SERP) plan.

The suit claims the retired officers of SDG&E have been denied “lawful, proper and fair supplemental benefits under the plan as a result of omissions by SEMPRA and its predecessors in faithfully carrying out terms of the SERP and its purpose and intended results,” according to a news release issued by plaintiff attorney Louis Goebel. This came after the company failed to grant any adjusted benefits in the 22 years since the first officers retired, in violation of the SERP arrangement.

The plaintiffs are all former officers of the company who retired between 1982 and 1985 and who had entered into the SERP adopted by SDG&E’s Board of Directors on July 15, 1981. As originally, drawn up, the SERP contained a provision for adjusting benefits, based on the Cost of Living Index. However, the suit claims cost-of-living adjustments were never made to the SERP agreement of the affected officers, even though the SDG&E Board amended the SERP nine times between 1985 and 1992, increasing benefits for officers who had not retired, according to the release.

Goebel said such purposeful disregard of a cost-of-living adjustment constitutes illegal de facto termination of benefits. “The breach of terms has continued for the last 20 or more years, and since the officers are old the companies were in violation of applicable “elderly abuse” statues that justify triple punitive damages,” the release said.

The suit seeks $12 million incompensatory and punitive damages against the energy company.Additionally, the lawsuit seeks relief from “anticipatory repudiation” of the plan’s benefits in the future, based on the record of the last 22 plus years. Goebel is asking the court to order future cost of living adjustments according to the pension plan.