Compliance February 19, 2015

PBGC Issues FAQs About Multiemployer Pension Reform

The FAQs are addressed to multiemployer plan participants, and provide a summary of certain reform provisions.
Reported by

The Pension Benefit Guaranty Corporation (PBGC) has issued frequently asked questions (FAQs) about the Multiemployer Pension Reform Act of 2014 (MPRA).

The FAQs are addressed to multiemployer plan participants, and explain how the new law enables pension benefits to be changed; how much pension benefit could be reduced; when participants have a say in whether benefits can be reduced; and when trustees of multiemployer plans can apply for a temporary or permanent reductions of benefits.

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

The PBGC and the Internal Revenue Service (IRS) have issued requests for information to help them with issuing guidance about the new law.

The PBGC FAQs are here.

Investing February 19, 2015

Northern Trust Agrees to Settle Securities Lending Suit

Northern Trust wants to put an end to litigation that has been ongoing since 2009.
Reported by

Northern Trust Investments has agreed to pay $36 million to settle a lawsuit claiming it violated the Employee Retirement Income Security Act (ERISA) in handling retirement plan assets invested in its securities lending program. 

The lawsuit alleges that Northern Trust breached its duties to retirement plans and their participants and beneficiaries by imprudently investing collateral received from securities lending activities and by charging impermissibly high fees. Plaintiffs Joseph Diebold, representing the ExxonMobil Savings Plan, and Paul Hundt, representing the Texas Instruments 401(k) Savings Plan, filed the lawsuit in 2009, alleging Northern Trust Investments and Northern Trust Co. had ignored warning signs indicating a different investment strategy was in order. 

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

The proposed settlement has been achieved on behalf of retirement funds that invested in Northern Trust’s Commingled Lending Funds, which participated in Northern Trust’s securities lending program, during the period January 1, 2007, through October 31, 2010. 

According to the settlement agreement, Northern Trust is entering into the agreement solely to eliminate the burden, expense and distraction of further litigation. The settlement is not an admission of any guilt. 

The final settlement in Diebold v. Northern Trust Investments is conditioned on final approval of the partial settlement of a similar case, Louisiana Firefighters’ Retirement System, et al. v. Northern Trust Investments, N.A., et al.

«