Administration January 6, 2007

Williams Stock Suit Settled with $311M Pact

June 13, 2006 (PLANSPONSOR.com) - Two pension funds have worked out a $311 million settlement agreement with Williams Companies concerning stock manipulation allegations.
Reported by

A news release Tuesday from the law firm Bernstein Litowitz Berger & Grossmann said the settlement caps a large-scale pre-trial discovery operation that included the taking of more than 150 depositions and reviewing of more than 18 million pages of documents for the trial that had been scheduled to begin for later this summer (See Judge Certifies Williams K Plan Company Stock Suit as Class Action ).

The law   firm was appointed lead counsel and a federal judge tapped the Arkansas Teacher Retirement System and the Ontario Teachers Pension Plan as lead plaintiffs, the announcement said.

Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.

According to the announcement, the October 2002 lawsuit alleged wrongdoing in two areas concerning company stock:

the purchase of Williams’ shares on the open market and the purchase of company stock during four securities offerings in 2001 and 2002.

The allegations relate to Williams’ former telecommunications subsidiary Williams Communications and Williams’ energy trading operation, known at the time as Energy Marketing & Trading. The allegations against Williams Communications concern Williams’ alleged failure to timely disclose that it would have to incur multi-billion dollar losses in connection with Williams’ guarantees of certain Williams Communications’ financial obligations.

In connection with the share purchase during the Williams’ Energy Marketing & Trading business, the suit charged that Williams manipulated the reported value of its long-term energy contracts in the midst of the California energy crisis in 2001. Based on these valuations, the two lead plaintiffs alleged that Williams inflated earnings by hundreds of millions of dollars during the period.

Administration January 5, 2007

Mellon Says 2006 Better for Pension Funding

January 5, 2007 (PLANSPONSOR.com) - The funded status of a typical U.S. pension plan improved by 3.5 percentage points in December 2006 and 10.9 percentage points for all of 2006, according to Mellon Financial Corporation.
Reported by

During the last month of the year, the assets of a moderate risk pension portfolio rose 0.7%, while typical liabilities declined 2.8%, due to sharply higher long-maturity bond yields.    During the year, assets at a moderate-risk U.S. pension plan rose 12.1%, significantly outpacing the 1.2% rise in typical liabilities, according to a press release.   Over the past five years, pension plans have managed to keep pace with liabilities, according to Mellon: assets have increased 7.3%, just ahead of liabilities, that have risen 7.1%.

“Overall, the typical U.S. pension plan finished the year in much better shape then it started,” said Peter Austin, executive director of Mellon Pension Services. “Interest rates finished the year higher, reducing the value of liabilities for the typical plan. At the same time, rising equity markets contributed to higher assets at the typical U.S. pension plan.”

Get more!  Sign up for PLANSPONSOR newsletters.

Better Than November

Liabilities for pension plans usually fall when interest rates rise. Unexpected changes in a plan’s demographics, among other factors, also affect the size of the benefit liability.   December’s results were an improvement from November, when Mellon noted that assets of a moderate risk pension portfolio rose 1.9% in November, but a sharp decline in long-term interest rates drove up the value of typical liabilities by 2.5% (see  Pension Funded Status Lost Ground in November ).   

Mellon measures the performance of liabilities through its Mellon Pension Liability Indexes, which were launched in March 2006. These indexes are designed to track the market values and market returns of pension liabilities for young, average and mature pension plans. (See more about the indexes  HERE )

«